The regulatory debacle behind SVB’s meltdown

Make Me Smart

Marketplace

News, Business

4.6 • 5.4K Ratings

🗓️ 21 March 2023

⏱️ 33 minutes

🔗️ Recording | iTunes | RSS

🧾️ Download transcript

Summary

Today we’re talking about the topic of the day, week, month, and maybe even year — banking.

Silicon Valley Bank’s tech startup-centric clientele and remarkably high amount of uninsured deposits made it different from a lot of other banks. But there’s a regulatory landscape in the background of SVB’s downfall story.

On the show today, Mehrsa Baradaran, a banking law professor at the University of California Irvine and author of the books “The Color of Money” and “How the Other Half Banks,” explains how regulatory changes made way back in the 80’s landed us where we are now, the psychological nature of bank runs, and what regulators can learn from this SVB-triggered banking episode.

In the News Fix, the case for incorporating more lentils and other climate-friendly foods into the American diet. Also, we’ll give an economics crash course on “Minsky moments.” And, why commercial real estate debt could become another problem for banks.

Later, one listener shares why they’re on TikTok, and another listener reminds us to remember the folks who are hit hardest by climate change. And, Kaye Wise Whitehead, president of the National Women’s Studies Association, explains why she was wrong about motherhood.

Here’s everything we talked about today:

- “How Silicon Valley Bank & Signature Bank Lobbied to Weaken Regulations That Could Have Prevented Collapse” from Truthout

- “Opinion | After Silicon Valley Bank collapse, scrap the deposit insurance limit” from The Washington Post

- “Federal Reserve and Lawmakers Eye Bank Rules After Collapse” from The New York Times

- “What Is a Minsky Moment? How Do World Debt Levels Look Now?” from Bloomberg

- “Why Americans should eat more lentils” from The Washington Post

- “Commercial Property Debt Creates More Bank Worries” from The Wall Street Journal

What have you been wrong about lately? We want to hear your answer to the Make Me Smart question! Leave us a voice message at 508-U-B-SMART, and your submission may be feat

Transcript

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0:00.0	This is Flea for this little light a podcast about falling in love with music
0:04.5	I started a nonprofit music school about 20 years ago called the Silver Lake Conservatory of music
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0:17.1	Thundercat Stuart Copeland Margot Price
0:19.7	Cory Henry Cynthia Arrivo Shealy E and Patty Smith
0:24.0	Please listen and follow this little light a presentation of cadence 13 on the Odyssey app or wherever you get your
0:29.7	podcasts and by American public media producer of marketplace thanking the great companies that support this program
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0:43.5	All right, let's go ahead
0:46.5	Hey there, I'm Kimberly Adams. Welcome to Make Me Smart where none of us is as smart as all of us
0:59.6	I'm Kyle Ristall. Thanks for being here on a Tuesday when we do a single topic to topic do you or do some man
1:05.8	I think the week maybe the month and maybe the year I don't know banking regulation in the United States of America
1:11.9	I know it sounds exciting, but it's super super important trust us
1:15.9	I know and here we thought we were gonna be like worried about the election all this year anyway
1:22.7	But instead we are so focused on banking and banking regulations and banking crises and banking failures and all of the little words
1:30.8	You want to attach to banking at the moment?
1:32.3	But one of the things we've been trying to figure out is the role that regulation played in the collapse of Silicon Valley bank and
1:40.1	What the rules that we have now and the rules we might have in the future might mean for the future of banking moving forward?
1:47.3	So here to make us smart about this is Marissa Barataran. She's a banking law professor at the University of California Irvine and
1:55.4	author of the books the color of money and how the other half banks welcome to the show
2:01.4	Thank you so much for having me it's great to be here
2:04.3	So I guess the obvious question was the collapse of SVB a regulatory failure? What happened?
	...

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