Special Episode: Richard Squire on the Collapse of Silicon Valley Bank

During this special episode, Richard Squire joins us to discuss the collapse of Silicon Valley Bank. Richard is a Professor of law at Fordham University School of Law, where he teaches corporate, business, and bankruptcy law, and he is here today to provide an overview of what has happened at Silicon Valley Bank, and analyze the elements that have led to this point. Join us to hear his perspective on the Federal Reserve’s failures, the role of moral hazard, and how middle class tax is redistributed to the wealthy. We discuss fractional reserve banking, Dodd-Frank, and interest rates, before we theorize about what the world would look like without inflation from money printing. Hear why Richard doesn’t advocate for lifting the insurance cap on deposits, which program is working in tandem with deposits, and why deflation is undesirable for the Federal Reserve with money multiplication and division in mind. Join us today to hear all this and more from today’s highly knowledgeable guest. Thanks for tuning in!

Key Points From This Episode:

• An introduction to today’s guest, Professor Richard Squire.
• Richard’s rundown on the bank run at Silicon Valley Bank.
• What Richard means by bad practices: a failure of risk management.
• The two main problems that caused the bank to fall into bankruptcy. 
• How the social media component fueled the panic around this crisis.
• The Federal Reserve’s failure to monitor interest rates at Silicon Valley Bank.
• Moral hazard at various scales.
• The redistribution of middle class tax to the wealthy in Silicon Valley.
• The cost of money printing.
• Fractional reserve banking.
• How different our approach to banking would be without inflation from money printing.
• Where Dodd-Frank fell short in addressing risk.
• Why Richard doesn’t advocate for lifting the insurance cap on deposits.
• The program that is working in tandem with deposits.
• Why deflation is in conflict with what the Federal Reserve wants.
• Money multiplication and money division.
• The impact of having no risk officer at SVB.
• A note that the insurance limit has not been limited for other banks.
• Why there is global interest in the Federal Reserve’s interest rates.

Links Mentioned in Today’s Episode:

Richard Squire on LinkedIn

Silicon Valley Bank

Dodd-Frank Wall Street Reform and Consumer Protection Act

Fordham University School of Law Corporate Law Center