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Comment by drstewart | Hacker News Reader

Funny that in threads about crypto companies failing everyone cries about "this is why we have regulations and safety valves in the financial industry!" but now when these are in force people cry about the safety valves and regulations existing, and how the companies should just be allowed to fail

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Who's doing that?

Part of the issue here is that SVB was able to get into trouble because important regulations and safeguards were removed years ago.

The ones that exist to minimize the wider impact of a bank failure are working, and I don't see anyone upset about that fact.

>Part of the issue here is that SVB was able to get into trouble because important regulations and safeguards were removed years ago.

Which important regulations and safeguards were removed?

I'm thinking of the Glass-Steagall Act that was put into place after the great depression. It prevented banks from engaging in both commercial and investment banking at the same time. You had to choose what sort of bank you wanted to be. The effect of this was to prevent banks from being able to take depositor's money and put it in risky investments.

It was effectively repealed in 1999 by the Gramm-Leach-Bliley Act. Its repeal is one of the things that allowed the 2008 crash to happen.

They bought treasuries and triple A rated mortgages. what else do you expect a bank to do to when seeking yield?

They aren’t just a vault for your money - they would charge you handsomely if so.

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