How Banks Turned Into Giant Synthetic Hedge Funds

2025-02-21 · 38 min · 12 entities

episode page audio

Asserted relationships

→ discusses Business company

0.40 · ×2

evidence rules-v4
Feed category: Business
→ discusses News concept

0.40 · ×2

evidence rules-v4
Feed category: News
→ discusses Investing concept

0.40 · ×2

evidence rules-v4
Feed category: Investing
→ discusses News Commentary concept

0.40 · ×2

evidence rules-v4
Feed category: News Commentary
→ hosted by Bloomberg company

0.40 · ×2

evidence rules-v4
Feed author/publisher: Bloomberg
→ discusses Business News concept

0.40 · ×2

evidence rules-v4
Feed category: Business News

Entities found in this episode

concepts 7

mentioned Investing concept

0.50 · ×2

evidence rules-v4
Feed category: Investing
mentioned News Commentary concept

0.50 · ×2

evidence rules-v4
Feed category: News Commentary
mentioned Business News concept

0.50 · ×2

evidence rules-v4
Feed category: Business News
discusses News concept

0.40 · ×2

evidence rules-v4
Feed category: News
discusses Investing concept

0.40 · ×2

evidence rules-v4
Feed category: Investing
discusses News Commentary concept

0.40 · ×2

evidence rules-v4
Feed category: News Commentary
discusses Business News concept

0.40 · ×2

evidence rules-v4
Feed category: Business News

companys 5

mentioned Bloomberg company

0.70 · ×2

evidence rules-v4
Feed author/publisher: Bloomberg
mentioned Barnard College company

0.62 · ×2

evidence rules-v4
professor at Barnard College
mentioned Business company

0.50 · ×2

evidence rules-v4
Feed category: Business
discusses Business company

0.40 · ×2

evidence rules-v4
Feed category: Business
hosted by Bloomberg company

0.40 · ×2

evidence rules-v4
Feed author/publisher: Bloomberg

Episode description as stored

Hedge funds are notorious for making big and sometimes risky trades. Banks, meanwhile, are supposed to be a lot more boring by comparison — for obvious reasons. But in recent years, we've seen banks like Silicon Valley Bank make some pretty bad bets themselves. Elham Saeidinezhad, an assistant economics professor at Barnard College, Columbia University, argues that banks have been turning into giant "synthetic hedge funds" by blending traditional lending activities with advanced financial strategies. The big question, of course, is whether they should be doing this at all, given that banks typically operate with a lot more regulatory constraint and might not be as nimble when it comes to entering or exiting positions. Read more: SVB’s 44-Hour Collapse Was Rooted in Treasury Bets During Pandemic SVB Failure Sparks Blame Game Over Trump-Era Regulatory Rule The Thorny Question of Why We Treat Banks Differently At All? Only Bloomberg subscribers can get the Odd Lots newsletter in their inbox each week, plus unlimited access to the site and app. Subscribe at bloomberg.com/subscriptions/oddlots See omnystudio.com/listener for privacy information.