Why Did SVB Fail? with John Boots
Do you want to understand the complex landscape of U.S. banking, the systemic issues that led to the 2008 financial crisis, and the current implications of SVB's bankruptcy? Join us as John Boots, the founder of Expedition Group, discusses the fallout of SVB (Silicon Valley Bank) that occurred a few months ago and what it means for the U.S. banking ecosystem. We'll discuss how regulatory oversight was limited leading up to the 2008 financial crisis, how big banks are reporting all-time profits post-crisis, systemic issues such as speculation in real estate lending and fraudulent practices that contributed to the downfall of the housing market, and more. We'll also explore the role of community banks in providing capital to entrepreneurs and take a closer look at Silicon Valley Bank's bankruptcy and the potential for an increased deposit insurance limit. [00:01 - 12:26] Opening SegmentJohn has an extensive background in real estate, private equity, structured finance, and bank regulationCurrently, banks are reporting all-time high profits, making it difficult for regulators to tell them noBank failures were mainly due to asset quality, and there was some fraud present in 10% of cases[12:27 - 25:26] Examining the FDIC Insurance Program and Its Impact on EntrepreneurshipBoxes of files revealed "ninja loans" with no income, no assets, and stated income/assetsCommunity banks have an important role in the economy & entrepreneurshipThe deposit insurance limit is likely to be raised in the next year[25:27 - 37:10] Silicon Valley Bank Failure: A Cautionary Tale for Business OwnersSilicon Valley Bank's failure was caused by a deposit run and poor asset/liability matchingReal estate deals are speculative, but there is still a need for homesQuestions to ask/track: percentage of tier one capital, earnings report, and call report[37:11 - 45:26] Navigating a Challenging Refinancing EnvironmentPrudent risk management strategies for money are importantReallocate funds back to principal repayment if possibleBe proactive and communicative with lenders[45:27 - 48:04] Closing SegmentQuotes:"Regulation is cyclical. So decisions that businesses make in mass are also cyclical, and there's very much a herd mentality." - John Boots"Community banks have an important place in the world. I think this country is built on the idea of chasing the American dream, creating your path." - John Boots "Self-awareness and just having your prudent risk management strategies for your money is probably the most important thing." - John BootsConnect with John!Website: www.expeditiongroup.co LinkedIn: https://www.linkedin.com/in/johnboots/ Download our FREE Strategizing for Inflation Guide here: https://www.excelsiorgp.com/download/Connect with me on LinkedIn!LIKE, SUBSCRIBE, AND LEAVE US A REVIEW on Apple Podcasts, Spotify, Google Podcasts, or whatever platform you listen on. Thank you for tuning in, and Stay Tuned for the Next Episode COMING SOON! Hosted on Acast. See acast.com/privacy for more information.