Are Bank Executives Rewarded for Failure?

It seems to be a recurring theme that bank executives are rewarded handsomely for their failures, and the recent news of bonuses being paid to Silicon Valley Bank's UK executives after being rescued by HSBC is no exception.

The HSBC rescue of Silicon Valley Bank's UK arm was not exactly a bailout, as the bank was purchased for only £1. However, this purchase was necessary due to the gross negligence of the bank's executives, who decided to buy long-term treasuries that were then sold at a huge loss when depositors requested their funds.

Despite contributing to the collapse of their bank, these executives were still rewarded with bonuses, much to the surprise of the general public. Even though these bonuses were described as "modest", it begs the question: where does the money for these bonuses come from?

Bonuses are a common practice in the banking industry, despite being uncommon in other industries. However, banking is becoming increasingly obsolete due to the emergence of financial innovations in cryptocurrency, which have sped up payments and reduced costs dramatically.

Nevertheless, people are still obliged to hold a bank account and deal with the inefficiencies and high costs associated with it on a daily basis. But change is on the horizon, and it's likely to accelerate in response to the frequency of bank collapses.

Governments and their central banks are now considering the imposition of central bank digital currencies (CBDCs) as a last resort. However, these CBDCs are likely to fail, given that they are based on the same system as traditional banking.

It's time to consider alternative solutions, such as Bitcoin. As always, this article is for informational purposes only and is not intended to provide legal, tax, investment, financial, or other advice.