[Finance] SVB - New banking crisis looming?

[jamie (not that one)]

To HSBC on a Bosman.

 

[Stat Brother]

Any excuse to watch The Big Short again...




...now f**k off.

 

[LamieRobertson]

China has been a capitalist country for years. The only difference is that it is run by a totalitarian regime.

Yep ..I said a well known capitalist country

 

[LamieRobertson]

Are you suggesting that China hasn't embraced capitalism (to whatever extent)?

Nope

 

[Thunder Bolt]

SVB UK bought by HSBC for £1 and will take over all their assets and liabilities. No cost to the UK taxpayer. Thank goodness for capitalism.

Facilitated (whatever that means)!

 

[Barham's tash]

There is moral hazard in bailing out a bank or its customers. It is up to shareholders to prudently manage the business and it is up to customers not to place too much of their funds with one niche bank. If the Government steps in then risk decision making will get even worse because of that safety blanket. I thought we had been through all of us 2008-13.

As an ex-HSBC employee it’s quite a surprise to see the traditionally conservative behemoth get involved in such things.

 

[Neville's Breakfast]

As an ex-HSBC employee it’s quite a surprise to see the traditionally conservative behemoth get involved in such things.

I would imagine they see an opportunity to make money from the customer list. The size of the risk book they are taking on is tiny compared to their own risk.

 

[Lenny Rider]

As an ex-HSBC employee it’s quite a surprise to see the traditionally conservative behemoth get involved in such things.

BT can I ask you as a former HSBC man please, what is the likelihood of any of our our 4 traditional high street banks ever going to the wall?

And if any of them did would there be anarchy/panic on the streets?

I don't know if it was an uban myth but in 2008 banking crisis is that right the ATM's were within hours of running out cash there was that many withdrawals?

 

[Dibdab]

Im moving a significant amount of my bank savings into gold and exploring other assets. The banks are ridiculously fragile and a couple of runs away from disaster. It's hard to envisage any other outcome than serious economic problems kicking in very soon.

 

[LamieRobertson]

Im moving a significant amount of my bank savings into gold and exploring other assets. The banks are ridiculously fragile and a couple of runs away from disaster. It's hard to envisage any other outcome than serious economic problems kicking in very soon.

So you dont think much of the 85k protection limit..or are you super wealthy and loaded.

Other assets…property..wine ..art

physical gold? Will you be keeping it at home..if so you local?

On a serious note all the best

 

[Barham's tash]

I would imagine they see an opportunity to make money from the customer list. The size of the risk book they are taking on is tiny compared to their own risk.

Very true but trust me they really aren’t this proactive in this space.

3,000 clients they obviously would love to bank - plenty of cross business line opportunity here [Investment Bank and Wealth Management arm must be absolutely licking their lips!] and as you say downside risk must be incredibly limited. I’m just surprised still.

 

[Deleted member 37369]

So you dont think much of the 85k protection limit..or are you super wealthy and loaded.

Other assets…property..wine ..art

physical gold? Will you be keeping it at home..if so you local?

On a serious note all the best

Talking of gold … I’m listening to this podcast while out for a long walk in this lovely gentle breeze!!

BBC Sounds - Gangster - Available Episodes

Listen to the latest episodes of Gangster on BBC Sounds

www.bbc.co.uk

 

[Neville's Breakfast]

BT can I ask you as a former HSBC man please, what is the likelihood of any of our our 4 traditional high street banks ever going to the wall?

And if any of them did would there be anarchy/panic on the streets?

I don't know if it was an uban myth but in 2008 banking crisis is that right the ATM's were within hours of running out cash there was that many withdrawals?

That last sentence is nonsense. And since then banks have become a lot more robust because of more regulation, in particular higher capital requirements for risky activities and more controls on lending.

 

[beorhthelm]

US seems to be more pessimistic about the prospects, Dow futures down significantly after being up earlier this morning.

 

[Icy Gull]

SVB UK bought by HSBC for £1 and will take over all their assets and liabilities. No cost to the UK taxpayer. Thank goodness for capitalism.

The stock exchange is not even vaguely impressed so far, FTSE in freefall. Down more than double DOW

 

[Barham's tash]

BT can I ask you as a former HSBC man please, what is the likelihood of any of our our 4 traditional high street banks ever going to the wall?

And if any of them did would there be anarchy/panic on the streets?

I don't know if it was an uban myth but in 2008 banking crisis is that right the ATM's were within hours of running out cash there was that many withdrawals?

As NB said the last sentence is utter garbage peddled by doom mongers looking for clicks back in 08.

Reality is regulation tightened so stringently since then that capital ratios - seen as a measure of strength of balance sheets - are way better than they were back then.

Short selling bans would likely be implemented in the event of a ‘run’ on any the household names as they were back then to stop profiteering from speculators.

And that’s before we even consider who the majority shareholders are in these institutions these days - lots of sovereign wealth funds and massive institutional investors.

In broad terms no there’s very little risk in comparison to where we were back then but that’s not to say there can’t be blood on the streets from a scenario like this.

 

[Machiavelli]

As an ex-HSBC employee it’s quite a surprise to see the traditionally conservative behemoth get involved in such things.

My suspicion is that they were lent on by the CoEx/BoE to do this for the precise reason that you offer: trad, con behemoth. Even if they didn't particular want to take this on, they can see the benefit in warding off contagion, and that they're well placed to take on the debt (on which and correct me if I'm wrong, I haven't heard that there's too much bad/extremely risky debt associated with SVB).
I'd be interested to know your thoughts.

 

[West Hoathly Seagull]

BT can I ask you as a former HSBC man please, what is the likelihood of any of our our 4 traditional high street banks ever going to the wall?

And if any of them did would there be anarchy/panic on the streets?

I don't know if it was an uban myth but in 2008 banking crisis is that right the ATM's were within hours of running out cash there was that many withdrawals?

No expertise whatever myself on banking, but weren't Barclays bailed out by a private deal with banks in Dubai, or their sovereign wealth fund, hence not needing any support from the UK Government? I seem to remember that Barclays were alleged to have had the most risky "casino banking" operation of the lot, as much of their Investment Banking division is based in the US, but that the private bailout deal avoided any real problems (I may have got all this wrong, and BT or Dazzer will have far greater knowledge than me). Whatever, my mother and I recently had to go to our local branch to sort out a large transfer, and the Personal Banker was quite happy in front of us to say that the two previous CEOs were hopeless and that staff were glad to see them leave the business.

 

[Curious Orange]

Presumably SVB UK comes under our regulatory framework, rather than the US one which was deregulated under the previous administration to remove the checks that would have meant the collapse of the parent company could have been avoided?

 

[Barham's tash]

My suspicion is that they were lent on by the CoEx/BoE to do this for the precise reason that you offer: trad, con behemoth. Even if they didn't particular want to take this on, they can see the benefit in warding off contagion, and that they're well placed to take on the debt (on which and correct me if I'm wrong, I haven't heard that there's too much bad/extremely risky debt associated with SVB).
I'd be interested to know your thoughts.

It’s interesting; spoken to a few ex colleagues who understand them to have been the most proactive in coming forward however I expect your assertion to be closer to the truth.

Well capitalised and aligned to the products and services offered through SVB so it made sense strategically but historically getting them to consider such opportunity was a slow process and often ruled them out of taking them.

Little to no credit risk involved so it’s a due diligence consideration more than anything and with c3,000 UK entity clients it’s a drop in the ocean.

Think it could easily be the best £1 ever spent for realised gains in c10 yrs and exactly the type of proactive effort investors had been asking them to take on in order to deliver bottom line growth.