#107 Todd Miller on Liquidity, SVB, and the Failure of Management and Regulators

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EPISODE CHAPTERS WITH FULL SUMMARIES ---------

(0:00:01) - Managing Interest and Liquidity Risk (10 Minutes)

We explore the importance of managing interest rate, liquidity, and credit risk together, focusing on cash flows, and understanding early warning indicators of liquidity risk. We also discuss the importance of focusing on future liquidity tracks versus past measurements as well as the risks associated with the failure of Silicon Valley Bank and the need to understand risks that can build up in hours, not days. Finally, we explore the need for credit unions to have a modern system in place that can track these risks in hours.

(0:10:00) - Communication and Blame in Bank Failures (12 Minutes)

The importance of having a clear communication plan in place, the finger-pointing that often occurs when banks fail, and the role that regulators have to play are discussed. Mismanagement is almost always to blame for bank failures, and how regulators may have contributed to the situation is explored. The FDIC and other government agencies used the crisis as an opportunity to call for pay raises and other regulations is considered. Lastly, the role of the CPA firm in the failure of Silicon Valley Bank and Signature Bank is examined.