The world economy has tightened; annual interest rates are changing at any time; and inflation has not been resisted. It is not surprising that Yinmen Bank, Silicon Valley Bank of America and other banks have got rid of the fact that economic development has turned against the wind.

But why now? The rapid rise in interest rates has done a lot of damage to the way banks work, but the failures of these special banks are surprising. Coincidentally, this kind of bank is crucial to the field of login passwords.

Arrange services for the agenda but implement them selectively

Government departments frequently use complex or unknown systems, policies and regulations to implement agenda arrangements. They were then able to justify the action, saying that the public interest was shaky.

Here's a contrast: in order to build a new highway, an apartment building must be completely demolished. The choice is not to implement the right of collection, that is, government departments have the strength to deny all leases and the right to use, and control the real estate industry. This cannot be a certainty favored by social development. There is another option. The local government is simply unable to implement the previous relevant regulations on maintenance, which makes the real estate in a state of disrepair.

A government inspector showed up. The real estate needs a major upgrade, or it will be condemned. Community owners can not afford to make property management in line with the requirements of the cost. For their own safety, residents must move to a new home and install it again.

This is the state of work of government departments.

The government has set up general rules and policies and regulations-implementing them selectively-and creating a situation in which the results he needs to achieve are achieved. They avoided direct accountability and public exasperation, but completed the necessary actions.

The present situation of the market is constructed

As domestic conditions begin to tighten, discretionary and foreign exchange speculative companies, such as start-ups, restaurants and financial derivatives, are the first to be affected. As a result, high-tech accounts and password industry banks are getting weaker and weaker at first. Most banks are committed to a foothold in special industries. If the users of a bank have gone bankrupt, then the situation of the bank is shaky.

If a bank goes public, once public investors understand the dilemma, the adverse effects will undoubtedly be devastating. SVB is trying to raise a lot of assets with open market operations to help change the status quo, as the market grabs the news and becomes bearish. Depositors fled to "safe" banks. One of the most typical bank crowds followed. In fact, the sales market is well prepared for regulatory intervention by banks.

Regulators use it flexibly

The failure of Silvergate and SVB and the recovery of Signature can be regarded as regulators taking the initiative to replace encrypted bank signals. If encryption can be separated from traditional banking processes by surgical methods, many of the problems that regulators feel exist can be solved. Once the encryption invasion is avoided, this type can be regulated proactively and will not make the public feel that investment opportunities are being taken away.

But this is not a conspiracy. In turn, regulators have used weak balance sheets and awkward bank practices to set scenarios in which it may be logical that he should intervene. There is no bank crowding out in Signature. Regulators used the confusion to implement an agenda arrangement.

Startups, especially login password startups, are essentially foreign exchange speculators. Because of the lack of regulation, the block chain in the scale of operation is a kind of "unknown quantity" of speculation. Think back to the comparison above. The lack of regulatory and regulatory positions has caused financial companies that serve technology and encryption companies to break the boundaries.

Because of macro-market conditions, this type of experiment has led to these banks being placed on the edge of capital adequacy ratios. When regulators intervened to "save the situation", they got a buy-one-get-one-free deal. They are said to be in determining the public interest because they circumvent the important role of the login password industry.

Infection is a meme.

No bank can survive the bank crowding out. Merit banking has created a system in which banks have no property to completely cover their customers' savings. If users gradually doubt the stability of a bank and quickly obtain savings, the bank will either go bankrupt or it will have to qflp. Infection is a meme, and like other memes, it is based on a profound and potentially unpleasant fact. Banks are not as smooth as the public thinks.

Knicks Cardholder called the key to the recent regulation of encrypted banks "short-board behavior". However, the overall goal of regulation has accelerated the bankruptcy of banks and undermined the stability of the entire financial system in everyone's eyes. For us, organizations like First Republic may face exclusion-First Republic is a traditional medium-sized bank. There will be more jogging below.

Market forces have opened the door for regulators to proactively replace encrypted banks based on controlled demolitions. But relocation investors are concerned about the existing multifaceted systemic risks. Controlled demolition is likely to serve the agenda ahead, but the dilemma is on the verge of spreading.

Franz Bradley is the head of business development at Heirloom, a software-as-a-service startup. He started in the cryptocurrency industry in 2014 as an independent researcher before going to work at Gem (which was later acquired by Blockdaemon) and subsequently moving to the hedge fund industry. He received his master’s degree from the University of Southern California with a focus on portfolio construction and alternative asset management.