3 ms·

Nobody is going to keep a billion dollars in a savings account, which FDIC insurance would not even come close to covering anyway.

by imgabe 9y ago

tialaramex 9y ago
Can you just loan your money directly to the US Government? In the UK the "National Savings & Investment" bank is actually outright owned and operated by the British government, specifically for this purpose. Instead of raising money commercially with a debt security, and then having banks buy that take savings from their customers to afford the securities and keep a cut as profit, the NS&I gets rid of the middle man and just borrows money directly from citizens at a decent interest rate with zero risk‡. ‡ Obviously the government itself might fail, but you're exposed to that risk anyway, so it didn't add any risk to involve NS&I here.
- dragonwriter 9y ago
  > Can you just loan your money directly to the US Government? Well, you can buy, e.g., savings bonds directly, but only $25,000 worth per year.
  - jonknee 9y ago
    But there are lots of types of US bonds and you can literally buy as much as you want (~$500b worth of them trade every day), it's the most liquid market in the world.
    - dragonwriter 9y ago
      Oh, yeah, I forgot that individuals can buy Treasuries directly from the government, I was thinking they only could on the secondary market which would not have been responsive to the query.
dragonwriter 9y ago
> Nobody is going to keep a billion dollars in a savings account, which FDIC insurance would not even come close to covering anyway. If you spread it around 4,000 banks (there are 5,593, so this technically possible), it would, since the limit is $250,000 per depositor per bank per ownership category (I'm assuming avoiding the overhead of manipulating ownership categories, which could shrink the number of banks needed further.)

3 ms·

Nobody is going to keep a billion dollars in a savings account, which FDIC insurance would not even come close to covering anyway.

by imgabe 9y ago

Nobody is going to keep a billion dollars in a savings account, which FDIC insurance would not even come close to covering anyway.

tialaramex 9y ago
Can you just loan your money directly to the US Government? In the UK the "National Savings & Investment" bank is actually outright owned and operated by the British government, specifically for this purpose. Instead of raising money commercially with a debt security, and then having banks buy that take savings from their customers to afford the securities and keep a cut as profit, the NS&I gets rid of the middle man and just borrows money directly from citizens at a decent interest rate with zero risk‡. ‡ Obviously the government itself might fail, but you're exposed to that risk anyway, so it didn't add any risk to involve NS&I here.
- dragonwriter 9y ago
  > Can you just loan your money directly to the US Government? Well, you can buy, e.g., savings bonds directly, but only $25,000 worth per year.
  - jonknee 9y ago
    But there are lots of types of US bonds and you can literally buy as much as you want (~$500b worth of them trade every day), it's the most liquid market in the world.
    - dragonwriter 9y ago
      Oh, yeah, I forgot that individuals can buy Treasuries directly from the government, I was thinking they only could on the secondary market which would not have been responsive to the query.
dragonwriter 9y ago
> Nobody is going to keep a billion dollars in a savings account, which FDIC insurance would not even come close to covering anyway. If you spread it around 4,000 banks (there are 5,593, so this technically possible), it would, since the limit is $250,000 per depositor per bank per ownership category (I'm assuming avoiding the overhead of manipulating ownership categories, which could shrink the number of banks needed further.)