Only days after being rescued by HSBC, the UK arm of the Silicon Valley bank received bonuses for its executives that total between £15m to £20m.
It might be argued that the SVB rescue was not a ‘bailout’ as such. It could be sustained that in fact the bank was bought by another bank (HSBC) … for a pound.
So after approaching a near collapse of the bank, which was engineered by the bank’s executives themselves, when they decided to buy long term treasuries which they were then forced to sell at a huge loss when depositors asked for their funds. This gross negligence was rewarded, just like it was back in the Global Financial Crisis of 2007/2008, by large bonuses to the banks’ executives.
Modest bonuses
This kind of occurrence appears to be so common and so matter of fact now that even the general public hardly turns a hair when it is reported that recently failed bank executives have been awarded bonuses after contributing to the collapse of their bank.
Comments on the matter by sources quoted by CoinTelegraph were along the lines that the bonuses were actually “modest”. It was also pointed out, as though to further bolster the case for the bonuses, that the stock owned by the executives had been “rendered worthless” by the bank’s collapse.
Bonuses in the banking industry are as extremely common as they are extremely uncommon in other industries. The question might also be asked as to where the money for the bonuses comes from?
Banking is inefficient, pays negligible return to depositors (especially after inflation is taken into account), and charges exorbitant fees to customers (credit cards, overdrafts etc.).
Banking is obsolete
In fact, given how financial innovations in crypto have sped up payments dramatically and at close to zero cost, it would appear that banking is practically obsolete.
However, people are still forced to hold a bank account, and are obliged to deal with the inefficiencies and high costs of doing so on a daily basis. However, change is coming, and that change is likely to speed up corresponding to the frequency of bank collapses.
The last throw of the dice for governments and their central banks is the imposition of central bank digital currencies (CBDCs). These are likely to fail, given that they are based on the same system.
Bitcoin anyone?
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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