For those that say we should have lower taxes and shouldn’t fund the government, how are these bailouts supposed to be financed? (It’s also fair to say regulators should have done a better job, but the truth is that they have been pushed to do less, not more.) 11 attacks, in the wake of the financial crisis in 2008, during the pandemic - and now we are at it again. Instead, because it is Silicon Valley, it commanded attention. was just a small regional bank that did not have ties to loud, politically connected venture capitalists and the tech community, it might have been allowed to die - and its customers, individuals and small businesses, would have suffered. This all looks particularly egregious after some of them spent the weekend begging for government help.īut the reality is that if S.V.B. Yes, these investors do good by funding start-ups, but they have also long lobbied for fewer regulations and also benefited from the special treatment of carried interest. The venture capital community, a group that includes a vocal group of libertarians, was just bailed out. This is likely to become the biggest debate of the coming weeks and months. Let’s admit it: Once the government guarantees all deposits, the “business” of banking isn’t much of a business - and maybe shouldn’t be. Let’s start with some takeaways from the dizzying turn of events: Too Big to Fail is as alive as ever, but now no bank is too small to fail as well.īanking is now officially a government-backed business, if it wasn’t before.
Monday’s newsletter is a special edition deep dive into what just happened. The decision has shaken up global markets, with investors selling bank stocks and betting that the Fed would hold off on further interest rate rises. banking system since the 2008 crisis, to limit carnage from the collapse of Silicon Valley Bank.
Federal regulators on Sunday unveiled the most sweeping backstop for the U.S.
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