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To be clear, you think the FDIC will be able to sell enough bank assets to cover 100% of deposits?
by sp332 4y ago
To be clear, you think the FDIC will be able to sell enough bank assets to cover 100% of deposits?
- woodruffw 4y agoNo, I think they'll recover a large percentage of it, and that the difference won't matter.
- Danieru 4y agoI don't think "being made whole" means what you think it means.
- JohnFen 4y agoThe FDIC will cover the portion that they couldn't recover from bank assets. The depositors will be made whole (up to $250k), but it may take some taxpayer money to do that.
- deleted 4y ago[deleted]
- Danieru 4y agoThe subject of OP's post is the non-insured deposits. No one, yet, has expressed doubt on the credit of the FDIC. Sub 10% of SVB's deposits were insured. Meanwhile SVB's HTM bonds have taken a 20%+ loss which will, barring an acquisition, cause non-insured deposits to take a 19%+ haircut. Combined with an indeterminate period of waiting. So start ups with cash in SVB should expect to lose 20% and find alternative sources to make payroll, pay payroll taxes, and pay suppliers. I expect we will see many startups close us shop when founders are unwilling to bail out their own company's balance sheet with personal money.
- JohnFen 4y agoAh, my bad. Then yes, I agree they probably won't be made whole by the fed or government. Nor should they, in my opinion.