[hackly]

My bank (in Canada) has limits on how much I can withdraw per day, per week, per month. Furthermore, there could be a delay of up to 5 business days before I can get the money to its destination. And that’s for money in the thousands only. How is that money in the billions can be withdrawn so quickly esp. since these were high value accounts each in the millions/billions? Couldn’t they just use one of their terms or conditions to delay the withdrawals and give themselves ample time to react?

[loopdoend]

This does not reflect the reality of business bank accounts in Canada.

When you have treasury access you can wire as much money as you want practically instantly just like with SVB. I bank with one of the big 5.

Nothing is stopping you from going into your bank and wiring money away it's just cash that they don't want to give out without multi-day delays.

[appleiigs]

Even in Canadian personal account you can wire as much as you want out - same day value to the destination. Only limitation is if you want it in cash because they'll have to get the paper bills delivered since the branch only holds so much paper bills.

[bitdivision]

I doubt those limits would apply to business accounts, which I'd guess were the majority of the withdrawals here.

Are you sure the limits on your account would apply to e.g. a wire transaction? Of course there are limits on ATM withdrawals and some other transfer methods, but I'm not sure they'd apply if you wanted to send a wire.

[chii]

> I'm not sure they'd apply if you wanted to send a wire.

Not many people (at least, people who don't deal with large sums) have experience with doing a wire transfer. Sometimes they're a bitch to deal with - but it's what you'd use if you are doing very large sums (like, in the order of 6 or 7 figures or more).

[inglor_cz]

Interesting. Where?

In most of Europe, wire transfers are really easy to do, and where I live, most banks now support instant wire transfers (10 seconds) under some limit (in my case, 15 000 Eur). Doing them using QR codes and smart banking apps is really straightforward and user-friendly, so people do them routinely even for small sums.

[chii]

> support instant wire transfers

that's not the wire transfer i am referring to - it's the one where you'd use a SWIFT code to designate the bank.

[inglor_cz]

This is something that probably differs in EU and the US.

Between EU countries, you need SWIFT, but within a single country, you usually don't (I think the exception is Poland, where SWIFT is the default...?).

[tacostakohashi]

Does it, in fact, not permit you to get to the entire balance immediately via, say, cash or a bank check?

It sounds like you are referring to something like an ATM withdrawal limit or online transfer limit which is just a risk / fraud limiting measure for those particular channels rather than a limitation on the account itself.

[timcederman]

Live Oak Bank limits business account withdrawals to $250k/day.

[shalmanese]

If you have a business which pays fortnightly and the average employee makes $250K, then just payroll for 26 employees will reach your limit.

[nulbyte]

You don't need currency to facilitate payroll; it's a series of transfers, not withdrawals. And the recipients don't usually need that much currency either, even if they do bank at the same place.

[lazide]

That’s a policy thing to limit capital outflows, not a technical limitation.

[fsckboy]

but that's exactly what we're talking about

[ozi]

No business is going to park their working capital with a bank that has those requirements.

[fsckboy]

no bank is going to give carte blanche to large customers to run the bank, they can't, and even if they promise it... As with all businesses, like a restaurant wants you to enjoy your food so you come back, the bank wants to provide the services the customers need. But everybody can't have everything especially all at once, and banks can't provide liquidity that has dried up.

sure, customers will periodically get mad and take their business elsewhere, but it's a fever dream to think that elsewhere is any different.

[quesera]

> no bank is going to give carte blanche to large customers to run the bank

If the funds are in a DDA (Demand Deposit Account a/k/a standard US checking account), the bank is legally obligated to honor outflow transfers of any size, at any time.

(Not physical cash withdrawals, although they have to make timely arrangements to satisfy these too)

Banks can make DDAs unattractive for large balances (e.g. no interest), but I'm not aware of any limitation on a customer's right to access their funds held in a DDA.

If banks could bend these rules, bank runs would never happen.

[fsckboy]

> the bank is legally obligated to honor outflow transfers of any size, at any time

they should have legally obligated SVB to remain solvent!

[quesera]

> they should have legally obligated SVB to remain solvent!

They did!

When SVB failed to meet those regulatory obligations, the bank was seized and the depositors were made whole.

So the system worked, right?

[tripletao]

The FDIC and Fed made policy changes in response to the SVB's failure--the FDIC is insuring all the SVB's deposits, including those >$250k, and the Fed is allowing all banks to borrow more than the FMV against certain assets that lost value when interest rates increased.

Without these changes, the SVB's depositors would have had access to maybe 50% or more of their uninsured money immediately, and maybe 90% or more eventually. They'd maybe have been made whole eventually; but the FDIC's inability to find a buyer over the weekend suggests that the SVB's assets weren't obviously greater than its liabilities to depositors, so maybe not.

The SVB's depositors have been made whole now only because regulators intervened with emergency policy changes to rescue them. That might have been a good idea, since it stopped contagion; or it might have been a bad idea, since it encouraged future risk-taking in anticipation of a similar ad hoc rescue. It certainly wasn't any kind of rules-based system working, though.

The SVB had been insolvent on a mark-to-market or NPV basis since around September. Accounting rules on bonds they intended to hold to maturity allowed them to ignore that, but didn't change economic reality.

[renewiltord]

We moved our stuff out of First Republic. Everything but $250k. Happened without a hitch. No one was mad.

[yieldcrv]

actually SVB and First Republic filled this niche of low friction and convenience.

so it was a perfect storm, for them.

[yardie]

Is that for a debit card? I understand the liability in draining a checking account with nothing more than a 4-digit PIN. On the other hand, I would never bank at a place that made withdrawal restrictions a condition to access my money.

[exhibitapp]

My business has 8 figures in the large canadian banks. I have had no problem sending all of it from institution to institution in single wires. Businesses can definitely move money at once.

The banks have corporate customers sign a number of complicated forms to put limits on things like who can wire, who can sign, who can weite cheques etc.

There are further controls in the online corporate banking

[8ytecoder]

Demand Deposit Accounts also allow you to withdraw without any advance notice. Most companies will have one. They wouldn’t want to sit around and wait for a banker to pay their suppliers or make payroll. Usually, most operational expenses like that are integrated into whatever systems they use and money moves where they want it to.

[computerex]

I don't think it would have meaningfully helped. Once the word was out that the bank was in distress it was game over. Company I work for also pulled out.

[ars]

That's very odd. I don't know if it's your bank, or something specific to Canada.

In the US the only limits are via the ATM or Debit card. If you write a check, go in person, or send a wire, you can withdraw as much as you want, with no time delay or restriction.

> Couldn’t they just use one of their terms or conditions to delay the withdrawals and give themselves ample time to react?

That's simply not a thing.

[pavon]

Every bank I have used in the US has limits and time delays for ACH transfers. While you can take out more with a check, practically speaking those take longer to process than an ACH transfer. And you already mentioned the limits with Debit and ATM. So all the methods that average consumers use to interact with their banks have limits and/or delays, and they may not be aware of other options.

[nullc]

The bank will happily tell you that wire transfers have no limits or delays.

[notch898a]

Yes my bank says that, but as soon as I actually do it they suddenly have to "do KYC" aka hold it up for days and give me lots of bullshit reasons why an already thoroughly KYC'd account needs to wait for a wire because reasons. Meanwhile not only can you not access the money in either of your accounts, the bank is drawing sweet sweet overnight IORB interest on it.

[adaml_623]

Why are you still banking with them?

[notch898a]

Honestly I just thought that was the way banking was done. I don't send a lot of wires (and everybody else I have dealt with were even worse).

[kragen]

maybe you're on some kind of special watchlist

[aeyes]

I'm not sure about the specifics but we had an account at SVB and weren't able to get it all out because of such limitations. I don't know exactly how the limits work because we definitely did ACH transfers in the millions before.

Also, it's not a cash withdrawal. We just wired the money to other accounts. Cash would require tons of paperwork.

[ant6n]

How would you pay for a house? Or a car?

[PakG1]

I presume a withdrawal is different from a wire transfer or cheque.

[trhr]

You're confusing real money with fake money. In America, we can only withdraw so much real money every day, too. The banks will tell you things like "We only keep $2000 in real money in the safe."

But the fake money never gets printed. It just lives in bits and bytes. You can move it around as much as you want.

Fortunately, it's as good as real money. It's just not as good as real wealth. Real wealth is in ammunition. Never goes down in price, skyrockets in price when the world gets more dangerous, and can be used to protect itself. That's where America has you beat, because we can turn fake money into ammunition whenever we want, as fast as we want.

Not to mention, it's a consumable resource that keeps well in storage but requires a high level of technology to produce. And even under non-apocalyptic conditions, it's about half as efficient as silver coins by weight and volume.

People downvoting this are politically opposed to guns because that's the fashionable thing to be in SV, but hackers have a strong gun culture. Always have, always will. Because we're practically all either anarchists or military.

[anonymouskimmer]

> People downvoting this are politically opposed to guns

Are you sure they're not downvoting you for being completely off topic while ranting about a hobbyhorse?

[trhr]

They could be. It's highly possible a bunch of engineers watched their backyard bank collapse and thought, "this is fine, I'm not worried, I'm a millionaire" when they don't even own a fuckin' home.