Sundry Edition
A Biweekly Newsletter by Salt of the Earth Consulting, LLC
Vol. 14 | March 15, 2023
At Salt of the Earth Consulting, we created Sundry Edition as a way to further our mission to be a trusted and beneficial partner within our community. Each newsletter includes a curated list of articles that fit a theme within the financial services industry. And, because at SOTE we each share a passion for music, we always include a few song recommendations!
What’s the Word on SVB
Everyone is talking about Silicon Valley Bank (SVB). In this Sundry Edition, we are highlighting some of the important conversations taking place now.
“The regulators had the tools they needed.”
Alpert, B. (2023, March 13). Regulators Had the Tools Needed to Prevent Bank Failures, Experts Say. Barron’s.
On Monday Kathy Dick, SOTE Founder & CEO, spoke with Barron’s reporter Bill Alpert about whether regulators had the tools needed to prevent bank failures. Dick notes that supervisors at state banking agencies could have raised concern about overly concentrated risks, stating, “The regulators had the tools they needed. If I were sitting at a banking agency, I’d look at the banks that fall between the Big Eight on down to $100 billion in assets, and make sure I have my arms around concentration at these institutions.” You can read more here.
“Investors and regulators … are trained to fight the last war.”
Tett, G. (2023, March 13). Silicon Valley Bank shows the perils of regulators fighting the last war. Financial Times.
In a Financial Times article published earlier this week, author Gillian Tett posits that regulators may have spent too much time focusing on the wrong risks. Tett writes, “[One] problem is that investors and regulators — like generals — are trained to fight the last war. Most notably, they spent the past decade worrying about credit and liquidity risks, since these respectively created the 2008 financial crisis and the market freeze in 2020. Interest rate risks, however, have grabbed less attention because they have not posed a significant threat in recent decades.”
So where do investors stand? On Monday, The Wall Street Journal writer Telis Demos set out to find whether the amount of uninsured deposits a bank has is impacting their shares, and found that the size of the bank is actually a much better indicator. In the article Demos notes, “Investors appear to feel [big] banks – having the most resources, the most diverse business units and being the most regulated – are going to emerge as winners.”
Let’s continue this conversation. At SOTE, risk management is one of our main areas of expertise, and we firmly believe that even with strong risk management it is always a good practice to get regular feedback. We would love for you to connect with us on LinkedIn, read more about our services, or get in touch.
What We’re Reading…
What We’re Listening To…
Right Here Right Now
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Change
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What’s Up?
4 Non Blondes
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