Dan Davies - Author of Lying for Money on Credit Suisse and the 2023 Banking Failures

Past Performers - by InvestOrama

Dan Davies is the author of Lying for Money and an expert on banking crises. We discuss the latest string of banking failures: Silicon Valley Bank, Credit Suisse and what that means for the financial system.

EPISODE LINKS

Lying for Money https://www.amazon.co.uk/Lying-Money-Legendary-Frauds-Workings-ebook/dp/B078WFT5JV Dan Davies's new substack: /backofmind.substack.com Twitter https://twitter.com/dsquareddigest QUOTES

“The trouble with fraud is it's like the evil twin of the real economy. It's part of the real economy, and you can't necessarily get rid of it. And it might be that the optimal amounts of fraud to tolerate might be surprisingly high.” “It was actually Credit Suisse that invented AT1 Bonds in the last crisis. The purpose of these securities is that they are meant to provide capital for a bank that's gone into resolution. They were high-yielding instruments, and that's why they were popular. But everyone getting into these things knew or should have known that if the bank gets into real trouble, they could get zeroed out. "Silicon Valley Bank looks like it's going to be the best bank ever to go into insolvency. It went bankrupt on US government bonds and agency mortgage bonds.” TIME STAMPS 00:00 Intro 00:57 Dan Davies Profile 03:06 The Credit Suisse collapse and AT1 Bonds 05:35 Is it a banking crisis? 10:19 The problem with narrow banks 13:22 The tough job of central bankers 22:04 Fraud and the Canada Paradox 24:25 Difference between hype and fraud 27:40 Vulnerability to fraud in happiness and good times in the 19th century 30:58 Detecting fraud 1: fast growth 33:10 2: People don't change 35:22 3: Check out the product not the demo 39:41 Response to the book 41:46 Narrative history 42:50 Dan's substack and next book

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