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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

#851

Post by locallost »

VoodooJuJu wrote: post #834

We deserve to see more useful top comments on this matter. The top ones in this and the main announcement thread [1] are just ad hominem complaining against some ostensibly "salty" or "cognitively dissonant" majority. Let's talk about skin in the game and bailouts. Explain to a peasant why he should have to share the risk you took with your money. Explain to him this game being played where he gains nothing when you…

Does the peasant share the risk? From the article:

> No losses associated with the resolution of Silicon Valley Bank will be borne by the taxpayer.

> As with the resolution of Silicon Valley Bank, no losses will be borne by the taxpayer.

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

#852

Post by mihaaly »

mkmk wrote: post #6

“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…

When I read the first sentence of the statement, but knowing ahead its generic content from news summary, this sentence:

> Today we are taking decisive actions to protect the U.S. economy by strengthening public confidence in our banking system

I laughed.

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

#853

Post by [deleted] »

VoodooJuJu wrote: post #834

We deserve to see more useful top comments on this matter. The top ones in this and the main announcement thread [1] are just ad hominem complaining against some ostensibly "salty" or "cognitively dissonant" majority. Let's talk about skin in the game and bailouts. Explain to a peasant why he should have to share the risk you took with your money. Explain to him this game being played where he gains nothing when you…

[deleted]

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

#854

Post by Lionga »

mixologic wrote: post #840
VoodooJuJu wrote: post #834

We deserve to see more useful top comments on this matter. The top ones in this and the main announcement thread [1] are just ad hominem complaining against some ostensibly "salty" or "cognitively dissonant" majority. Let's talk about skin in the game and bailouts. Explain to a peasant why he should have to share the risk you took with your money. Explain to him this game being played where he gains nothing when you…

All banks take risks with the money that their customers deposit with them. Sometimes those risks are bad, and banks cannot fulfill their obligations to their customers, so the FDIC, which is funded by banks (its deposit insurance ) steps in and fixes a bank so that customers of that bank do not get screwed by picking a bad bank. I dont see how any peasants are 'sharing any risk' here. Everybody who held stock in SVB…

Anyone having a bank account will pay for it trough the banks fees/rates etc. Yellen avoided directly using tax money for the bail out, but it just is the next closest thing.

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

#855

Post by tigershark »

boxed wrote: post #838
VoodooJuJu wrote: post #834

We deserve to see more useful top comments on this matter. The top ones in this and the main announcement thread [1] are just ad hominem complaining against some ostensibly "salty" or "cognitively dissonant" majority. Let's talk about skin in the game and bailouts. Explain to a peasant why he should have to share the risk you took with your money. Explain to him this game being played where he gains nothing when you…

> Explain to a peasant why he should have to share the risk you took with your money Well.. in this specific case I don't think tax payers (I assume this is what you mean by "peasant") actually do share any of the risk/cost. The bank failed due to a liquidity problem. It actually has a pretty solid financial situation except for that! This isn't a "bail out" per se.

No, it didn’t have a liquidity problem, it was insolvent. The value of all its assets marked to market are less than its liabilities.

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

#856

Post by EVa5I7bHFq9mnYK »

machina_ex_deus wrote: post #702
hn_throwaway_99 wrote: post #40

Yellen 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…

Banks have lost all excuses to be making money out of other people's deposits. If those deposits are guaranteed by the government, and backstopped by the government, then there's absolutely no reason banks should be able to invest any of them. There's absolutely no excuse left for why banks get to invest any of their clients money. They get free leverage from their clients for free. They can send it to zero and the e…

They must pay salaries - about 2% of deposits. They must pay interest on deposits - now people are demanding 4%. They must pay some dividends too. So they must invest in something.

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

#857

Post by Lionga »

locallost wrote: post #851
VoodooJuJu wrote: post #834

We deserve to see more useful top comments on this matter. The top ones in this and the main announcement thread [1] are just ad hominem complaining against some ostensibly "salty" or "cognitively dissonant" majority. Let's talk about skin in the game and bailouts. Explain to a peasant why he should have to share the risk you took with your money. Explain to him this game being played where he gains nothing when you…

Does the peasant share the risk? From the article: > No losses associated with the resolution of Silicon Valley Bank will be borne by the taxpayer. > As with the resolution of Silicon Valley Bank, no losses will be borne by the taxpayer.

Anyone having a bank account will pay for it trough the banks fees/rates etc. Yellen avoided directly using tax money for the bail out, but it just is the next closest thing.

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

#858

Post by epups »

VoodooJuJu wrote: post #834

We deserve to see more useful top comments on this matter. The top ones in this and the main announcement thread [1] are just ad hominem complaining against some ostensibly "salty" or "cognitively dissonant" majority. Let's talk about skin in the game and bailouts. Explain to a peasant why he should have to share the risk you took with your money. Explain to him this game being played where he gains nothing when you…

Companies making payroll or not is where the general public's skin in the game comes from. We can let them fail by crossing our arms, but this would lead to mass layoffs and financial turmoil as otherwise healthy companies have to shut doors due to this bank's mistakes. This would then also likely lead to a huge bank run, as most other companies realize they have to diversify their accounts and start scrambling to divert money at the same time.

I would also like to add that the vast majority of people losing their money were not betting on a risky asset. They merely had bank accounts with an institution that was mismanaged. We are not bailing out risk-takers like we did in 2008.

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

#859

Post by bagels »

VoodooJuJu wrote: post #834

We deserve to see more useful top comments on this matter. The top ones in this and the main announcement thread [1] are just ad hominem complaining against some ostensibly "salty" or "cognitively dissonant" majority. Let's talk about skin in the game and bailouts. Explain to a peasant why he should have to share the risk you took with your money. Explain to him this game being played where he gains nothing when you…

It's sleight of hand. I'm guessing the solution is that the money comes from all of us, but just through bank fees, higher interest rates on loans, and lower interest rates on deposits because the banks are paying more to the FDIC, as opposed to the money coming directly from the treasury and thus our taxes.

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

#860

Post by tlonny »

This was the only rational course of action.

It's slightly disheartening to see so many people on HN willing to invite a wider collapse of the US banking system in order to punish/hurt a group of people they deem to be "elite".

Talk about cutting off your nose to spite your face!

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