Joint statement by the Department of the Treasury, Federal Reserve, and FDIC

Post by chernevik » Sun, Mar 12, 2023, 11:39 PM UTC

modeless wrote: post #393

chernevik wrote: post #377

It's a bailout. They're putting the cost, presently unknown and probably not huge, on the other banks. But the message to depositors everywhere, of every size, is "don't worry about your bank's solvency, we'll protect you". So market scrutiny is removed as a discipline on bank asset strategy. That leaves regulation as the only control. That politicizes and bureaucratizes bank lending. And the general presumption that…

Shareholders are wiped out, so there will still be quite a bit of market scrutiny on banks. Edit: just to point out that I'm not claiming this is "not a bailout because shareholders were wiped out". It's a bailout of course.

Post by lxm » Sun, Mar 12, 2023, 11:39 PM UTC

seizethecheese wrote: post #282

bradleyjg wrote: post #160

So depositors at banks taking on big risks get elevated interest rates or other perks for years, and when the shit hits the fan depositors that put their money in prudent banks get to bail them out through higher fees. And people wonder why turnout is low. There’s no way to vote for non captured politicians.

Evidence that SVB paid higher interest than other banks? This doesn’t seem to be the root cause here. They had a huge volatility in deposit base.

Post by jurassic » Sun, Mar 12, 2023, 11:40 PM UTC

jongjong wrote: post #372

version_five wrote: post #112

So they made their decision, everyone can move on. I just hope nobody forgets how prominent VCs behaved during the brief period of uncertainty. The idea of some noble class of investors championing disruption is dead. They're just a bunch of rent seekers like everybody else. For some silly reason I had some respect for the startup industry before this, now I see it as a joke. It's great at a personal level that "foun…

It's impossible to move on. There were insufficient funds to pay depositors; meaning, the money was gone - Since the money didn't vanish into thin air; somebody got that money through some scheme. Now taxpayers are going to be footing the bill... It's a government-ordained transfer of wealth from good, honest taxpayers to whatever (possibly malicious) entities got that money. It's theft. It's straight theft. Not even…

Post by antibasilisk » Sun, Mar 12, 2023, 11:40 PM UTC

version_five wrote: post #112

So they made their decision, everyone can move on. I just hope nobody forgets how prominent VCs behaved during the brief period of uncertainty. The idea of some noble class of investors championing disruption is dead. They're just a bunch of rent seekers like everybody else. For some silly reason I had some respect for the startup industry before this, now I see it as a joke. It's great at a personal level that "foun…

Post by astrostl » Sun, Mar 12, 2023, 11:41 PM UTC

cragfar wrote: post #164

It's pretty embarrassing how many people thought depositors should be on the hook for this. A banking system where companies or people would actually lose money due to bank failures (especially one caused by a run on the bank) would just lead to people only using BOA, JPM, and some merged WF/Citi/whoever else.