4 ms·

FDIC covers only up to 200k USD. Many people have lost life savings when banks collapse. Also, not everybody lives in the US or in countries with a semi decen

• rsj_hn 4y ago
  > Many people have lost life savings when banks collapse. Do you have some data for this statement? (in the US, post FDIC deposit era) Because even when a bank fails, there is usually more than enough to cover depositors, and what the FDIC does is arrange for the bank to be taken over by a healthy bank, with the deposits migrated (but equity and bondholders can take a bath). E.g. no depositor lost a penny in the financial crisis of 2008 -- which was the biggest financial crisis since the Great Depression -- even if they had money in excess of the limits. However it's quite unusual to have money in excess of the limit -- if you have that much, you wont keep it as a deposit, you'll hold some government guaranteed bonds like agencies or treasuries. It is extremely poor cash management for an individual to have more than 200K in a demand deposit account when they can be earning more with government guaranteed bonds that are just as liquid as cash. You can even open an account with Treasury Direct.
  • dragonwriter 4y ago
    > E.g. no depositor lost a penny in the financial crisis of 2008 No depositor has lost a penny in an FDIC insured account (even with total balances above the insurance limit) ever since the FDIC has existed.
    • rsj_hn 4y ago
      Do you have an example of a depositor losing money they stored in excess of this? Even a single example would do.
      • dragonwriter 4y ago
        No, I’m saying even with excess balances, no one has lost money in accounts subject to FDIC insurance; there are no examples, it hasn't happened.
        • rsj_hn 4y ago
          Sorry, I misunderstood -- thanks!
  • gasull 4y ago
    It has happened in other countries, like Cyprus. Accounts were also insured up to 200k EUR (or I think it was only 100k at the time).