The Biden administration is pushing back hard on the idea that Silicon Valley Bank was bailed out by the federal government.https://t.co/GKrgsqQzev
— Axios (@axios) March 13, 2023
How it works: When a bank fails, depositors are made whole by the FDIC insurance fund. The insurance only covers deposits up to $250,000, although there are plenty of workarounds that allow depositors to effectively buy much more FDIC insurance than that.
In the cases of SVB and Signature Bank, FDIC insurance will now cover all depositors, regardless of size. The FDIC insurance fund — which is funded by a levy on bank deposits — stands at roughly $125 billion.
It's worth noting this is nothing radical or new. Uninsured depositors have been paid out in full in every bank failure in living memory, with just one exception — IndyMac, in 2008.
Between the lines: In the absence of Sunday's announcements, the insurance fund would have been pressed into heavy duty by the onset of an inevitable banking crisis.
Conversely, in the presence of the announcement, there's no need for anybody to move their money at all, and the pressure on the fund could be tiny.So basically a bunch of Silicon Valley fat cats (who all resemble Elmo in their ignorance and business acumen) who know nothing about how the FDIC works screamed like stuck pigs and now want to be congratulated for their ignorance.
Have I got that right?
Pretty sure this is right:
Mark Cuban: Bailout Silicon Valley Bank TONIGHT
— Warren Gunnels (@GunnelsWarren) March 13, 2023
Feds: Approved
Lloyd Blankfein: Goldman Sachs needs $824 billion
Feds: Approved
Jamie Dimon: JPMorganChase needs $416 billion
Feds: Approved
Average Joe: My wife got cancer. Can we get Medicare?
Feds: We're broke.
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