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It's a little more complicated. Nobody wants to socialize the loss for the bank's management or stockholders. They're gonna be wiped out regardless. But we so
by eqmvii 4y ago
It's a little more complicated.
Nobody wants to socialize the loss for the bank's management or stockholders. They're gonna be wiped out regardless.
But we socialize losses for bank depositors all the time, it's a lot less objectionable generally. It's just harder to be sympathetic when the depositors are risky startups.
- matthewdgreen 4y agoRisky startups run (or funded) by people like Bill Ackman who have been urging the Fed to tighten its monetary policy [1], which is precisely the policy that caused SVB to fail. [1] https://twitter.com/BillAckman/status/1529133155801829380 https://twitter.com/BillAckman/status/1529133155801829380
- mustache_kimono 4y ago> It's a little more complicated. I'd beg to disagree. Bank makes bad bets. VCs put all their eggs in bad bank. VCs now hold a gun to our head. "But the depositors?!" Who is a depositor of more than $250K cash in an account who can't take a 20-30% haircut, because they didn't understand FDIC insurance? And why shouldn't they? Because they're special? This is an argument that only makes sense to people with mid 6 figure salaries, a gold plated benefits package, stock options/grants, Uber Eats for lunch. Everyone else says -- "Looks like those depositors made a mistake, huh?"