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I think your criticism is a bit misguided. The FDIC insurance fund only covers a tiny fraction of bank deposits and if a single small bank had a run the fund wo
by loourr 5y ago
I think your criticism is a bit misguided. The FDIC insurance fund only covers a tiny fraction of bank deposits and if a single small bank had a run the fund would be insufficient to cover it's customer base. It also covers derivative losses before balance losses, so it's really more of a psychological tool then anything else.
Also banks are investing all of your money in highly illiquid risky assets (aka mortgages) so I don't see how this would ruin the economy or even meaningfully change the risk profile if adopted at a large scale.
- rrrrrrrrrrrryan 5y ago> The FDIC insurance fund only covers a tiny fraction of bank deposits Isn't it $250,000 per customer? It wouldn't be enough to save the bank if there was a run (because of accounts with huge balances), but it'd be enough to save most of the customers that need saving.
- notyourday 5y agoIt is a per-signator per-bank per-type per-POD
- Cola 5y agoI wouldn’t say 250k per person per bank per account type is a tiny amount. Moving money from a bank account to the market is a significant increase in risk for all but the most wealthy.
- jaywalk 5y agoI wish I had so much money that $250k was a tiny fraction of it.