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by dragonwriter
1194 days ago
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> I had the vague impression that after the 2007 crisis, banks holding retail deposit accounts were not allowed to invest in stuff like MBS, only investment banks (without retail accounts) were. You are confusing the Great Recession with the Great Depression. The 2007 crisis and subsequent Great Recession was contributed to by the 1999 repeal of that rule, adopted in response to the Great Depression; there were several efforts to restore it after the Great Recession, but none succeeded. |
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I think the financial crisis ended in 2009, when at the time there was fear that Citibank would be the next to collapse. A rule change was made to allow banks to value "hold to maturity" assets at the purchase price instead of the current market value, so that they could avoid an insolvent balance sheet. The problem for Silicon Valley Bank was apparently that they needed to sell some of the assets and take the loss.
* https://en.wikipedia.org/wiki/Glass%E2%80%93Steagall_legisla...