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FDIC Takes over Silicon Valley Bank

fdic.gov

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Re: FDIC Takes over Silicon Valley Bank

#301

Post by zackmorris »

Looks like the FDIC coverage limit was raised to $250,000 in 2008 and made permanent in 2010, before that it was $100,000 since 1980.

https://americandeposits.com/history-and-timeline-of-changes...

Plugging that into any online inflation calculator, $1 in 2010 is $1.33 in 2023. So FDIC insurance should really cover $333,000, and people could lose $83,000 or more due to coverage not being raised.

This is one of 1000 examples of how deregulation and defunding government programs often backfires on the people calling for it. It's almost like the people who casually deal in hundreds of thousands of dollars don't know the value of the dollar, because they got that money by skimming it from their employees.

Re: FDIC Takes over Silicon Valley Bank

#303

Post by plonk »

mangosteenjuice wrote: post #93
woeirua wrote: post #52

LMAO. Can't even believe how many people were confidently asserting that nothing was wrong yesterday. If you had more than $250k in SVB yesterday you probably just took a huge haircut. Hundreds of startups will become illiquid as a result of SVB's collapse, and there will be major layoffs here in the next 90 days as founders realize that they lost their funds and cannot raise in the current VC environment.

A good lesson for everyone who forgot the last cycle. Slowly, then all at once.

SVB isn't Lehman Brothers.

Re: FDIC Takes over Silicon Valley Bank

#304

Post by bgc »

An interesting tidbit from the Bloomberg live thread[0]:

>The FDIC prefers to close a bank over the weekend, shutting it down on Friday and reopening Monday, Steven Kelly, senior research associate at the Yale Program on Financial Stability, told me.

>“The midday takeover suggests the bank couldn’t responsibly operate until the end of the day,” Kelly said.

[0]https://www.bloomberg.com/news/live-blog/2023-03-10/the-fall...

Re: FDIC Takes over Silicon Valley Bank

#306

Post by davidw »

berkle4455 wrote: post #214
banku_brougham wrote: post #107

Earlier quoted context omitted.

Its so funny until you realize your seed-round investment in a friends company used SVB. Gonna be quite a show, this.

They’ll most likely be made whole or close to whole. It’ll just take time, so as long as that startup doesn’t have a huge burn already, should be fine. Anyway you bought % in their company which you still own, the cash was gone when you wired it.

> likely be made whole or close to whole

I've seen several versions of this sentiment here. What are people basing it on? I don't know much at all about the situation.

Re: FDIC Takes over Silicon Valley Bank

#307

Post by chasd00 »

zenmacro wrote: post #163

Wow, the government acted incredibly swiftly and decisively to crush the possibility of a general bank panic. The current US banking system is very different from the 2008 system.

well they got a finger in the dam leak at least. The question is, is it the only leak or are other cracks going to appear with more leaks?

Re: FDIC Takes over Silicon Valley Bank

#308

Post by ncallaway »

senttoschool wrote: post #212
hijinks wrote: post #170

Earlier quoted context omitted.

they turn into creditors of the bank to try to get the money back from asset sales. That could take years though it isn't quick

Isn't that a death sentence for a startup? Even if you get your money back years later, you're company is already dead because it can't make payroll. At that point, the money will just go back to the VCs?

From the FDIC release there will be an advance payment on uninsured assets within the next week.

My guess is they take a week to look through the books, determine an absolute floor for the value of assets, and use that floor to proportionately pay out uninsured depositors.

So, some additional funds will be available soon. We don't yet know how much.

The rest will probably be locked up while the process plays out. I've heard different timelines for that.

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