Do you want to understand the complex landscape of U.S. banking, the systemic issues that led to the 2008 financial crisis, and the current implications of SVB's bankruptcy?
Join us as John Boots, the founder of Expedition Group, discusses the fallout of SVB (Silicon Valley Bank) that occurred a few months ago and what it means for the U.S. banking ecosystem. We'll discuss how regulatory oversight was limited leading up to the 2008 financial crisis, how big banks are reporting all-time profits post-crisis, systemic issues such as speculation in real estate lending and fraudulent practices that contributed to the downfall of the housing market, and more. We'll also explore the role of community banks in providing capital to entrepreneurs and take a closer look at Silicon Valley Bank's bankruptcy and the potential for an increased deposit insurance limit.
[00:01 - 12:26] Opening Segment
- John has an extensive background in real estate, private equity, structured finance, and bank regulation
- Currently, banks are reporting all-time high profits, making it difficult for regulators to tell them no
- Bank failures were mainly due to asset quality, and there was some fraud present in 10% of cases
[12:27 - 25:26] Examining the FDIC Insurance Program and Its Impact on Entrepreneurship
- Boxes of files revealed "ninja loans" with no income, no assets, and stated income/assets
- Community banks have an important role in the economy & entrepreneurship
- The deposit insurance limit is likely to be raised in the next year
[25:27 - 37:10] Silicon Valley Bank Failure: A Cautionary Tale for Business Owners
- Silicon Valley Bank's failure was caused by a deposit run and poor asset/liability matching
- Real estate deals are speculative, but there is still a need for homes
- Questions to ask/track: percentage of tier one capital, earnings report, and call report
[37:11 - 45:26] Navigating a Challenging Refinancing Environment
- Prudent risk management strategies for money are important
- Reallocate funds back to principal repayment if possible
- Be proactive and communicative with lenders
[45:27 - 48:04] Closing Segment
Quotes:
"Regulation is cyclical. So decisions that businesses make in mass are also cyclical, and there's very much a herd mentality." - John Boots
"Community banks have an important place in the world. I think this country is built on the idea of chasing the American dream, creating your path." - John Boots
"Self-awareness and just having your prudent risk management strategies for your money is probably the most important thing." - John Boots
Connect with John!
Website: www.expeditiongroup.co
LinkedIn: https://www.linkedin.com/in/johnboots/
Download our FREE Strategizing for Inflation Guide here: https://www.excelsiorgp.com/download/
Connect with me on LinkedIn!
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