‘Operation Choke Point 2.0’ may have contributed to SVB’s collapse: Mulvaney

May 26, 2023 | Luke Huigsloot
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Mick Mulvaney, Donald Trump's former chief of staff for White House agents, said that if the US government did carry out choke point 2.0, it would endanger financial security and could lead to the bankruptcy of Silicon Valley banks.

Murwani mentioned the rumored action in an interview with Bloomberg News on March 22. "I don't want to think the government can really do this," he said. " However, he does remember participating in the hearing system about the initial choke point behavior-a government promotion designed to limit some areas of US banking services.

"you may ask whether some of the current policies promulgated by the US government have increased the cost of increased risk and instability-perhaps unintentionally or unexpectedly-whether we have just seen this at SVB." He added.

"SVB gets people because they are really good at SVB, and there are some kinds of factors that show that people are in SVB, because no one else will accept you."

Malvani argued that, in his view, the login password had nothing to do with the downfall of SVB, implying that embarrassing risk management was the culprit. However, he hinted that the pressure on Bank of America to prevent encryption may be one of the reasons for the bankruptcy of SVB.

Knicks Carter, founder of Coin Metrics, coined a technical term designed to prevent financial institutions from owning encrypted deposits or providing banking to encrypted companies to ensure the security and stability of banking.

Although it is not clear whether "short board 2.0 behavior" is an official website development strategy, Carter claims that there is evidence to apply it.

Related to:Yellen's defense of government intervention to avoid the recurrence of SVB

In an online article on February 9th, Carter outlined some fantasy-related evidence, setting out a joint declaration on login password assets by the Federal Reserve, the Federal Deposit Insurance Corporation (FDIC) and the Office of the Superintendent of Monetary Engineering (OCC), which warned that the decentralized blockchain system "is likely to be inconsistent with the practices of safe and stable financial institutions."

Recently, critics said that FDIC did not solve the login password assets differently during the recovery period of Signature Bank, further confirming the emergence of "short board 2.0 behavior".

Related to:Best and worst encryption tax in our country / region-plus encryption tax reminder

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