Item — HN Reader

SVB was exempt from a lot of the post-2008 stress tests because they were not a National Bank (aka they got their license/charter and everything from CA's Banking Regulators).

It's an open secret that state banking regulators are much more lax than Federal Regulators (eg. Basel III exemption).

This is a big reason why almost all the post-GFC bank collapses are all State Chartered Banks.

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Huh! That is quite interesting, thanks! I wonder if the Feds will now take a deeper interest in more direct oversight of these banks given the seriousness of the issues that were allowed occur under this climate.

Federal Regulators wanted to push greater oversight into State Charters during the GFC as well, but due to Federalism they couldn't push it as much.

That was a big reason why they pushed regional banks to be acquired by National Charter banks during that fiasco.

Because of the limits of American Federalism, it's easier to use M&A driven consolidation to make the banking industry more robust in the US than by dealing with 55 different legislatures (50 states and the 5 territories).

If you want to have a rough feel of dealing with local charters I'd recommend seeing the whole Mesa Verde storyline in Better Call Saul - (spoilers) the whole reason Kim Wexler was hired to work with them was because that local NM bank wanted to expand into other states and as such needed to get a charter in other adjacent states like TX, AZ, UT, CO, etc.