Stefanie Schulte #GenoVerband
@schulte_stef
Followers
4K
Following
49K
Media
1K
Statuses
18K
Bank regulations at #Genossenschaftsverband @geno_verband (German association of #coops), personal account, #economist. She/her. @[email protected]
Düsseldorf, Germany
Joined October 2014
"small and medium-sized firms perform better in counties with a large number of cooperative banks":
11
164
111
Listen, young things who want to tell me my banking business model is wrong because "banks create deposits when they lend". I know they do. I was writing about this when you were in school. And I was developing systems that did this before you were born.
5
7
94
15 years on from the GFC, people have forgotten everything we learned about banking from that crisis. The old myths are back, with a new crop of self-appointed gurus promoting them.
14
24
125
@schulte_stef yes, that's one of their key insights and often missed.
1
1
2
@Frances_Coppola Interestingly, Diamond and Dybvig won a Nobel Prize just last year for, among other things, showing that the structure of bank liabilities itself creates economic value. https://t.co/LBA5V09Bk2
1
2
3
@R0nnieDriver I suppose everyone could adopt the US-style originate-to-distribute model. What could possibly go wrong?
0
1
2
4. #TooBigToFail means that banks are becoming larger as would be economically sensible, see https://t.co/vYcX9iAFFL and
ideas.repec.org
We examine whether “too‐big‐to‐fail” (TBTF) factors affect estimates of scale economies for large banks. From a standard model of bank production that does not control for any TBTF factors, we find ev
1
3
5
1. 'Too-Big-to-Fail' banks tend to take on more risk: https://t.co/dzSGh5KsnC (@NYFedResearch paper)
#TooBigToFail distorts the banking market, and it encourages unhealthy risk-taking. A lot of research about #TBTF has been published during the past decades, but it didn't get much attention. Therefore we compiled a paper with numerous sources (in German):
1
21
10
I think it's a good time to re-up this thread from 2018. Much of it still seems very relevant today. #TooBigToFail
1. 'Too-Big-to-Fail' banks tend to take on more risk: https://t.co/dzSGh5KsnC (@NYFedResearch paper)
0
1
3
YUP. A key problem here is a profound culture clash and cultural misunderstanding...tech bros have sneered at banking and been very uninterested in money management issues for a long time...
@gilliantett Saw a clip with Sheila Bair suggesting the need for VC children’s book on basics of how banks operate. Even a strong bank can’t function in face of massive bank run and in this case, a concentrated VC book with a bullhorn was uniquely positioned to magnify the effects of a run.
3
5
21
Here are slightly older numbers from @FDICgov (2019) that define as community banks only banks with $10 billion or less in total assets. Among those, 90% had total assets of $1 billion or less: https://t.co/R5nIuHk1QB
0
0
0
I would argue: The big banks ($250 billion is huge!) have lobbied fiercely to get similar regulatory relief as actual small banks (e.g., one with $250 million in total assets). Now to demand that the truly small bank should be regulated just as strictly would be just as wrong.
I hope the quid pro quo for the massive bailout the Fed and the US government have just extended to regional/community banks will be much tighter regulation and closer supervision of these banks.
2
2
3
Reminder: The @ecb classifies any bank as "significant" if the total value of its assets exceeds €30 billion.
bankingsupervision.europa.eu
0
1
1
As far as I know, "community banks" in the U.S. were usually defined as banks with total assets of no more than about $10 billion. Why it might make sense to extend this regulatory limit to $250 billion (!) was never clear to me.
@dcorbellawatkin @RBReich Reich is correct. Silicon Valley Bank and others that were not #250 bn were exempt from key liquidity requirements. I detail that in here. Democrats & most Republicans supported EGRRCPA https://t.co/Up4Sm8iXnN
@Forbes @BankingGOP @senatebanking @FSCDems @FinancialCmte
1
1
2
On the sand dollar (a central bank digital currency): "the obvious alternative [...] would have been to encourage greater use of bank issued debit cards and more efforts to educate the older generation in the use of electronic payments": @MartinCWWalker
blogs.lse.ac.uk
How is the “world’s most advanced central bank digital currency" progressing? @MartinCWWalker
https://t.co/0MhApborVz
1
3
2
Not wanting to get into the technical weeds but you have to keep a few lists of assets you own and sums of money you owe to other people.
In light of FTX people will be surprised to learn how Fractional Reserve banking works.
6
12
91
Watching crypto is like a month by month reminder of why modern banking & securities regulation exists.
8
71
350
For me personally as a science journalist, Twitter has been an amazing experience connecting me with 1000s of people around the world. I have learned and laughed a lot here. Twitter was always far from perfect, but it was usable and it was unique in what it offered. Now we wait…
1
5
70
Many users have been paying a high price for all this, especially women and people of color who were targeted with threats and abuse. Twitter was always awful, @devisridhar told me: „They rarely acted on reported tweets and there’s always been abuse and threats on the platform.“
2
9
69
The sheer amount of expertise on Twitter is stunning. As @M_B_Petersen told me, Twitter has become a major public good: „I believe it has played important roles in the dissemination of knowledge globally and between scientists and the public during, for example, the pandemic.”
2
24
114