So, is this a bailout, that we are definitely absolutely not calling a bailout?
Joint statement by the Department of the Treasury, Federal Reserve, and FDIC
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Re: Joint statement by the Department of the Treasury, Federal Reserve, and FDIC
#52“After receiving a recommendation from the boards of the FDIC and the Federal Reserve, and consulting with the President, Secretary Yellen approved actions enabling the FDIC to complete its resolution of Silicon Valley Bank, Santa Clara, California, in a manner that fully protects all depositors. Depositors will have access to all of their money starting Monday, March 13. No losses associated with the resolution of S…
This special fee will most likely be passed onto bank account holders either through lower interest rates or higher fees, so most taxpayers with bank accounts will likely be affected indirectly.
Re: Joint statement by the Department of the Treasury, Federal Reserve, and FDIC
#53It was announced as a footnote in this Treasury announcement , which also guarantees 100% deposits for both SVB and Signature Bank above 250k
So we have a bailout. In case you missed it, SVB successfully lobbied Congress to weaken dodds regulations. So in a way, similar to 2008, Main Street pays so the rich will not loose their funds.
https://www.theguardian.com/business/2023/mar/11/silicon-val...
https://fortune.com/2023/03/11/silicon-valley-bank-svb-ceo-g...
https://www.dailymail.co.uk/news/article-11847295/CEO-collap...
Re: Joint statement by the Department of the Treasury, Federal Reserve, and FDIC
#54"...Any losses to the Deposit Insurance Fund to support uninsured depositors will be recovered by a special assessment on banks, as required by law..."
Is this what passes for a FED press release? Which law? Clear as mud. Did the Fed just established an infinite deposit insurance coverage in the US?
Re: Joint statement by the Department of the Treasury, Federal Reserve, and FDIC
#55It's a bit embarrassing to have to invoke the systemic risk exception when regulations on these banks were relaxed in 2018 on the theory that they wouldn't pose a systemic risk if they got into trouble. This should spark some serious soul searching from everyone involved in that effort, but I'm not holding my breath. Anyway, I'm happy for all the depositors.
Why are you happy for the depositors? They took a risk depositing more than what was covered by fdic. to clarify, i'm happy for the employees, workers, etc that will remain employed while their company made poor decisions. My beef is that companies knowingly took risks. Would this even be an issue if all the VC companies didnt all try to pull their money out on Thur/Fri ?
I can't believe we're on day 3 of this and it still has to be explained. SVBs depositors were mostly companies. Companies don't go to new banks every time their account balance reached $250k. If these deposits were not honored thousands of companies would not be able to make payroll.
Re: Joint statement by the Department of the Treasury, Federal Reserve, and FDIC
#56> No losses associated with the resolution of Silicon Valley Bank will be borne by the taxpayer. i'm out of touch with how much of this works, can someone explain how this is paid without burden to the taxpayer?
Not an expert either, but this: > Any losses to the Deposit Insurance Fund to support uninsured depositors will be recovered by a special assessment on banks, as required by law. suggests other banks will effectively pick up the bill?
So taxpayers will pay, but through their bank deposits and mortgages?
It's hard not to see how this will be "private the profits, democratise the losses".
Re: Joint statement by the Department of the Treasury, Federal Reserve, and FDIC
#57Yellen and the FDIC is in a tough spot. This is the important line, "Any losses to the Deposit Insurance Fund to support uninsured depositors will be recovered by a special assessment on banks, as required by law." Thus, on one hand, I'm glad they're doing this, as it should help prevent wider bank runs, and it ensures that banks are the ones that are actually paying for it. At the same time, this is yet another exam…
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Re: Joint statement by the Department of the Treasury, Federal Reserve, and FDIC
#58Re: Joint statement by the Department of the Treasury, Federal Reserve, and FDIC
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Re: Joint statement by the Department of the Treasury, Federal Reserve, and FDIC
#60> No losses associated with the resolution of Silicon Valley Bank will be borne by the taxpayer. i'm out of touch with how much of this works, can someone explain how this is paid without burden to the taxpayer?
Not an expert either, but this: > Any losses to the Deposit Insurance Fund to support uninsured depositors will be recovered by a special assessment on banks, as required by law. suggests other banks will effectively pick up the bill?
idk if the numbers exactly add up here or if there are other sources of funding but the I in FDIC is Insurance, which is already paid for - the FDIC has money from insurance premiums to cover expected cost of losses