Ask HN: What are you doing differently post-SVB? | Hacker News Reader

Ask HN: What are you doing differently post-SVB?

11 pointsgnicholas8 comments

The Fed has just announced that they're backstopping SVB's depositors beyond the $250k FDIC amount. What are you doing differently in the wake of this incident?

Are you diversifying your banking relationships since the possibility of a run is now on your radar?

Are you not diversifying because they just saved SVB (and announced some new programs that should protect against this sort of incident happening in the future), so you expect it would be less likely than before?

How do people feel about doing business with SVB in particular? Some people said that opening a commercial account with them required exclusivity — is this true/will it be enforced going forward?

Are there any silver linings to this scare?

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>Are there any silver linings to this scare?

Maybe the rest of us will realize that the investor class does not know what they're doing. Yes, all of them.

Which is OK. They were "right" in the past and got rich. That doesn't increase their chances of being right in the future or in the present. The key thing is that they assume the risks. If the investor class is wrong, they get wiped out and replaced by smarter people.

Except these super-smart people who know more (except apparently about banking risk, which fucks up their world every 12 years, and then they immediately forget about) will then explain why it's an ugly situation, but you really have to save their investments.

An example (you can save this for the next time) - https://twitter.com/sama/status/1634958179657449475

Put money in the riskiest high return bank I can find. Hopefully I can find a bank with all Assets in 0DTE Options or even better some have all assets in some ponzy crypto that pays out 50% yield until it does not. Should get 25% interest rates on this kind of deposit.

FED/Treasury will always come to bail me out if needed.

I don't have >$250k in the bank so I'm not doing anything differently. I have some assets outside of banks (the usual suspects) in the unlikely event of a total failure across the banking industry.

Although if something at that scale happens I wouldn't be surprised if most of those went kaput as well, in addition to general civilization collapse. But not all (because some of those assets don't rely on companies existing or not).

I'm not in the enviable position of needing to allocate huge multiples of the FDIC limit, but this has been a learning experience. I knew that for individuals, you could use the FDIC limit multiple times, by having joint/single accounts at the same bank. I now know that does NOT apply to business accounts.

I will likely open accounts with a couple banks in the coming months, so that I can shuffle things around if needed. I was already looking at ways to get higher yields, and I guess I will diversify while I'm at it.

I'd be curious to know what folks are doing who have to manage 10-20x the FDIC limit. Seems like we're all now on notice that bank runs are a thing, and it would be irresponsible to put all your eggs in one basket.

there is https://en.wikipedia.org/wiki/Certificate_of_Deposit_Account... "The Certificate of Deposit Account Registry Service (CDARS), was a US for-profit service that broke up large deposits (from individuals, companies, nonprofits, public funds, etc.) and placed them across a network of more than 3000 banks and savings associations around the United States. This allowed depositors to deal with a single bank that participates in CDARS but avoid having funds above the Federal Deposit Insurance Corporation (FDIC) deposit insurance limits in any one bank."

CDARS : This was something that I was searching for. Any idea about their fee structure? How much does their service cost?

You get lower rates for sure and I think you have to agree to lock up the money in 1, 5, or 10 year CDs. When I looked into it I found just using banks like

https://www.emigrantdirect.com

https://www.capitalone.com

savings got you a better rate and no lock up required. But you have to do the 250k chunks yourself.

- Diversify, yes. Will explore CDARS as marked by @andrewfromx in one of the comments below (https://youtu.be/gerVpi32Y_c)

- We had off shore accounts (in UK & India) & were actually considering to move everything to SVB. Good that we didn't.

- Moving money out of SVB? Yes. But not in a hurry as it was looking to be the case just 10 hours ago

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