57
votes
Was Silicon Valley Bank's failure due to "Trump-era deregulation", and/or do Democrats share blame for it?
I was hesitant to answer this because I'm not certain I'm enough of an economist to give you a full answer. However, I think I can explain much of what you asked, and in the end I'm not convinced ...
- 8,973
36
votes
How do governments keep track of their issued currency?
Bank notes have serial numbers. The mint keeps track of what's been issued, and also the quantity of notes that have been taken out of circulation and destroyed.
Back accounts are another matter. In ...
- 22k
35
votes
Has Russia actually defaulted on its foreign debt as of April 11, 2022?
No - Russia has not currently (April 11th 2022) defaulted on its sovereign debt. What the CNN article is referring to is S&P’s downgrading of the country’s credit rating to ‘selective default’. ...
CDJB♦
- 105k
33
votes
Why is the ongoing auction for Silicon Valley Bank started held privately (vs. publicly)?
"Public" has a particular meaning in a share sale. It means that any investor can purchase shares and comes with lots of rules about transparency.
But what the regulators want is a single, ...
- 115k
32
votes
To what extent does China need the SWIFT system?
China needs the SWIFT system quite a bit, because its economy is heavily driven by international trade, especially exporting manufactured goods, in a diversified market with large numbers of small to ...
- 73k
26
votes
Accepted
Has any government throughout history banned foreign currencies?
This has happened a few times before, and is usually a rather extreme measure used to promote the use of, and trust in, local currency, as opposed to transactions being conducted using a more stable ...
CDJB♦
- 105k
22
votes
Why are Amex fees allowed in the European Union?
These are considered cards issued by three party schemes, from europa.eu:
Credit and debit cards issued by three party schemes (such as American Express and Diners Club), and business or corporate ...
JJJ♦
- 38.9k
21
votes
Accepted
How can Switzerland maintain a banking system which is almost unaccountable to the rest of the world?
It really was not all that long ago (1990's) that banks were not really connected to each other and while they had computers to help track and calculate balances, the paper trails were the way changes ...
- 8,861
20
votes
Why are Amex fees allowed in the European Union?
The explanation is somewhat simple. Regulation (EU) 2015/751 of 29 April 2015, which capped the interchange fees for four-party schemes like Visa and Mastercard, was according to a World Bank ...
- 144k
17
votes
Has any government throughout history banned foreign currencies?
Currency controls or foreign exchange controls have happened time and again in history, taking different forms. At the extreme end, all foreign currency must be surrendered to the government at the ...
- 106k
17
votes
What's the point of banning a few 'selected Russian banks' from SWIFT?
It makes doing business more difficult (and more expensive) for Russians, while still allowing the US to buy Russian oil and Europe to buy Russian gas.
- 106k
17
votes
Accepted
Why didn't Silicon Valley Bank ask for a loan from the Fed as the lender of last resort?
Because that would be a bailout and the US government [regulators] said "no bailouts" in this case. Now the FDIC owns all of the banks assets (as a bridge bank) and is trying to sell them (...
- 144k
16
votes
Has any government throughout history banned foreign currencies?
Soviet Union
In USSR, any dealings with foreign currency without a special permit (in essence, allowing exporters to get paid in currency and immediately trade them for roubles at the central bank and ...
- 5,619
14
votes
How do governments keep track of their issued currency?
For example, I have $100 in the bank. I pay $50 to someone else, so the bank is supposed to take $50 away from me and add it to the other person's balance (or send it to their bank). How does the ...
- 245
14
votes
To what extent does China need the SWIFT system?
In a nutshell, to the extent that it wants to trade with the West, or at least to the extent that it likes to have a trade surplus with the latter. China is not yet in a position to impose its own ...
- 144k
13
votes
Has any government throughout history banned foreign currencies?
Argentina
There is even a wiki article on it, Argentina currency controls (2011-15):
Those controls limited the ability to buy or sell any foreign currency. The restriction was informally known in ...
- 232
12
votes
Accepted
Why is the EU so reluctant to cut Russia off the SWIFT system as part of the new sanctions to be put in place after invading Ukraine?
Update 2022-02-26: several Russian banks got banned from SWIFT.
This New York Times article argues that keeping Russia in the SWIFT system is to keep buying Russian energy, not give an edge to China ...
- 3,558
12
votes
Has Russia actually defaulted on its foreign debt as of April 11, 2022?
In international finance, a credit event is a legal and contractual term which means that financial instruments like credit default swaps come due. Such a credit event can happen if the debtor has no ...
- 106k
12
votes
Does the Federal Reserve insure the money of all depositors?
The Federal Deposit Insurance Corporation is insuring deposits up to $250,000 per owner. A bank run can still happen (still did happen, in the recent case of the SVB) when large customers are starting ...
- 106k
11
votes
What's the point of banning a few 'selected Russian banks' from SWIFT?
The main effect of excluding banks from Swift is an immediate and drastic interruption in trade: Neither party can pay for goods received and services rendered any longer.
There are two reasons to ...
- 9,363
11
votes
Does the Federal Reserve insure the money of all depositors?
It depends on what you mean by "bank run". It's generally understood to mean a situation where depositors make withdrawal demands that exceed the assets of the bank that are sufficiently ...
- 7,903
10
votes
Does the Federal Reserve insure the money of all depositors?
The Federal Reserve in its role as lender of last resort will lend money to a solvent bank that’s suffering a bank run and having temporary cash flow problems. But it appears that SVB was insolvent — ...
- 3,864
10
votes
Why didn't Silicon Valley Bank ask for a loan from the Fed as the lender of last resort?
The math on a loan from the Fed may not have worked out
A loan from the Fed would have to be paid back at current interest rates. Meantime, SVB is getting payments from long-dated bonds that it ...
- 1,716
10
votes
Can governments avoid being trapped between the choice to let a big bank fail or increase banking concentration?
The Glass-Stegall legislation was meant to prevent these types of situations.
The legislation puts a firewall between "commercial bank" and "investment bank" activities. There's ...
- 10.4k
9
votes
Accepted
What does "breaking up" a company mean?
The Air Mail Act of June 12, 1934, the vertically integrated
United Aircraft and Transport Corporation (UATC) was broken up into three companies: United Air Lines Transportation Company, United ...
- 2,941
9
votes
Accepted
How many financial centres are to be created in the EU?
It's hard to prove a negative, but ultimately the answer to this is likely to be no.
These financial centres already exist. The source article is paywalled, but presumably it's talking about the ...
- 23.9k
9
votes
Has any country besides Iran been banned from SWIFT?
Democratic People's Republic of Korea
https://www.worldfinance.com/banking/swift-cuts-north-korean-banks
SWIFT cuts North Korean banks (March 17, 2017)
Financial communications platform SWIFT has ...
- 3,448
9
votes
Was Silicon Valley Bank's failure due to "Trump-era deregulation", and/or do Democrats share blame for it?
It's not entirely clear to me what they are talking about, but if it's about the LCR requirement that was relaxed in 2018 for banks under $250 billion, then if you believe BPI's calculation, SVB would ...
- 144k
8
votes
Has any government throughout history banned foreign currencies?
The list here seems pretty complete. Most, if not all of the countries are either socialists or socialist "sympathizers". The outliers in the trend seem to be Russia, India and Ukraine, ...
- 221
Only top scored, non community-wiki answers of a minimum length are eligible