About the editor: Your coverage of the Silicon Valley Bank and Signature Bank failures was thorough, but some of your articles left out a very pertinent fact. (“All Silicon Valley Bank Client Funds Guaranteed, U.S. Officials Say,” March 12)
After the catastrophic bank failures of 2008, Congress passed the Dodd-Frank Act, which, among other things, required banks with assets in excess of $50 billion to pass certain stress tests, including maintaining sufficient liquidity to meet the claims of potential depositors. to fulfil. The Trump administration watered it down and raised that wealth threshold to $250 billion.
This allowed both Silicon Valley Bank and Signature Bank to escape tighter liquidity requirements, and Federal Deposit Insurance Corp. forced to take over these two. Thank you again, former President Trump.
Ken Goldman, Beverly Hills
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About the editor: There is a little known fact about the recent bank failures.
The FDIC has only $128 billion, a small fraction of the funds needed to cover the estimated $10 trillion in insured bank accounts. If just a few medium-sized banks failed, the FDIC itself would default.
That would require the Federal Reserve to step in and give these banks enough credit to cover customers’ bills, as they just did for Silicon Valley Bank. Such a large-scale intervention would further fuel inflation and force the Fed to raise interest rates further.
The safest way for many companies and individuals is to park their money in short-dated government bonds.
Hal Goldberg, Laguna Woods
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About the editor: On Monday, the front page of your print edition reported that billionaires and others received a packed lunch with their money at the Silicon Valley Bank.
The back page of the newspaper featured an article about “food insecurity” and poor children being excluded from government lunch programs. My advice to poor kids: hire the same lobbyists the banks use and you’ll never go hungry again.
Or should we perhaps impose “bailout uncertainty” on billionaires?
Eric Alter, Woodland Hills
Source: LA Times
Roger Stone is an author and opinion journalist who writes for 24 News Globe. He is known for his controversial and thought-provoking views on a variety of topics, and has a talent for engaging readers with his writing.
