16 ms·

> The FDIC will pay uninsured depositors an advance dividend within the next week. Depending on the amount, this can possibly make things a lot better for the

> The FDIC will pay uninsured depositors an advance dividend within the next week. Depending on the amount, this can possibly make things a lot better for the startups banking there.

tus666 4y ago
Beyond the actual amount insured by the FDIC?
- stingrae 4y ago
  It says uninsured depositors.
  - tus666 4y ago
    The FDIC insures everyone, up to a certain amount.
- cocacola1 4y ago
  Seems to be what it says: > All depositors will have full access to their insured deposits no later than Monday morning, March 13, 2023. The FDIC will pay uninsured depositors an advance dividend within the next week. Uninsured depositors will receive a receivership certificate for the remaining amount of their uninsured funds. As the FDIC sells the assets of Silicon Valley Bank, future dividend payments may be made to uninsured depositors.
- krasin 4y ago
  > Beyond the actual amount insured by the FDIC? My understanding that everyone will receive anywhere from 70% to 90% of the uninsured parts of deposits eventually. Uninsured does not mean "... and it's gone". It rather means "best effort to get it back".
- deleted 4y ago
  [deleted]
- zt 4y ago
  Every bank account is insured up to $250K. Beyond that, customers have "uninsured deposits" But the FDIC is in the process of selling all the banks assets, which nearly cover all of their outstanding deposits. No one knows how much that difference will be right now. But companies should expect a lot more than just the minimally insured deposits back.
  - dannyw 4y ago
    Nearly all? Their "held to maturity" portfolio was down 17% as of year-end 2022. Source: https://www.netinterest.co/p/the-demise-of-silicon-valley-bank https://www.netinterest.co/p/the-demise-of-silicon-valley-ba...
    - loeg 4y ago
      Yes, but before it was down, they had substantially more assets than deposits owed. > As of the end of December, SVB had roughly $209 billion in total assets and $175.4 billion in total deposits Say $80B of that is worth 83% of the HTM value on their balance sheet. That would be $14B less, or $195B in assets against $175B in deposits. I don't know the details of their holdings or exact difference between market prices and their HTM accounted value, but the important points are (1) they started with a lot more assets than deposits and (2) different portions of their balance sheet have declined different amounts. It's not all 10-year 1.5% MBS notes; only about $80B is.
jjtheblunt 4y ago
Where does the money come from? I mean that non-sarcastically, confess I've not figured out the way the banking system in the large works. edit : thanks all for coherent clear responses.
- deleted 4y ago
  [deleted]
- runlevel1 4y ago
  > Q. What is the source of funding used by the FDIC to pay insured depositors of a failed bank? > A. The FDIC's deposit insurance fund consists of premiums already paid by insured banks and interest earnings on its investment portfolio of U.S. Treasury securities. No federal or state tax revenues are involved. Source: https://www.fdic.gov/consumers/banking/facts/#:~:text=what%20is%20the%20source%20of%20funding https://www.fdic.gov/consumers/banking/facts/#:~:text=what%2...
  - loeg 4y ago
    Well, no, that's only true if the bank doesn't have sufficient assets to cover secured deposits. Secured deposits were less than 10% of deposits at SVB and they have plenty of assets to cover that; the money comes from selling those assets. The only question is how much money uninsured depositors will get and where it will come from (selling the whole bank, or the assets individually).
  - SoftTalker 4y ago
    > its investment portfolio of U.S. Treasury securities In other words, IOUs to itself, like the social security “fund”
  - paxys 4y ago
    This isn't the answer to the question that was asked. Yes deposits up to $250K will be paid out using FDIC's normal insurance process (and will be available for all bank customers Monday morning). FDIC is also promising some portion of the remaining uninsured money sometime next week (the "advance dividend" they mention). The source of those funds is undetermined.
ellisv 4y ago
Yes but a week can be a long time. Startups trying to make payroll for the 15th might be in a tough spot.
- markdown 4y ago
  LOL, Silicon Valley tech workers aren't living hand to mouth, and they have credit cards. They'll survive a week without pay.
  - zt 4y ago
    You underestimate how wide spread SVB's depositor base is and who all these "tech workers" are. SVB has offices in Georgia, North Carolina, three in Texas, etc, etc. A lot of them will have trouble if payroll isn't met (not to mention the company's legal obligations to pay people on time for work already done).
  - ellisv 4y ago
    If your company doesn’t make payroll, how long would you keep working there? Most people don’t/won’t/shouldn’t work for IOUs.
    - wpietri 4y ago
      Everybody works for IOUs. It's just a question of how much credit you want to give them.
      - wpietri 4y ago
        Huh. From the downvotes, I'm confused. Does anybody get paid in advance? As far as I know, "do the work today, get paid soon" is how it works for basically everybody in the US.
        ellisv 4y ago
        Almost no one is paid in advance. Most people expect to be paid on a regular schedule, e.g. biweekly, semimonthly, monthly. If you do the work and don’t get paid soon, what’s your expectation going forward?
dannyw 4y ago
Bill Ackman says ~50%: https://mobile.twitter.com/BillAckman/status/1634662286844411904 https://mobile.twitter.com/BillAckman/status/163466228684441... That should be enough for payroll, but not enough to spark a mass exodus from small and regional banks into the "systematically important banks" (ie too big to fail).
- throwawaysleep 4y ago
  What exactly is the individual risk of moving everything to big banks? Seems like a no brainer move to shift your cash to JPM, at least until this blows over.
  - sjm-lbm 4y ago
    That's exactly the point: not guaranteeing deposits incentives everyone to move all their money beyond 250k into a big 4 bank as soon as they can on Monday morning. Great for JPM, but could be deadly for a huge section of the US banking industry.
    - wpietri 4y ago
      Unfortunately, guaranteeing deposits for everyone creates moral hazard, because it means people will not pay attention to the risk level of their bank, giving bank CEOs even more incentive to play "heads I win, tails they lose" with taxpayer money. I am all for FDIC insuring accounts, and I'm fine with the level being as high as $250k. But anybody with a lot of cash beyond that should already understand what the word "uninsured" means. If they don't my sympathy for them is limited. If we're going to spend billions more on improving the social safety net, people with hundreds of thousands of dollars in cash just lying around are not my first priority.
      - sjm-lbm 4y ago
        I really don't understand the moral hazard here. The people making risk decisions - ie, the SBV staff - should absolutely be wiped out. If there's a legal way to claw back the proceeds from the stock sales they made in the run up to the last few days, I wouldn't have a problem with that either.

> The FDIC will pay uninsured depositors an advance dividend within the next week. Depending on the amount, this can possibly make things a lot better for the startups banking there.

tus666 4y ago

Beyond the actual amount insured by the FDIC?

stingrae 4y ago
It says uninsured depositors.
- tus666 4y ago
  The FDIC insures everyone, up to a certain amount.
cocacola1 4y ago
Seems to be what it says: > All depositors will have full access to their insured deposits no later than Monday morning, March 13, 2023. The FDIC will pay uninsured depositors an advance dividend within the next week. Uninsured depositors will receive a receivership certificate for the remaining amount of their uninsured funds. As the FDIC sells the assets of Silicon Valley Bank, future dividend payments may be made to uninsured depositors.
krasin 4y ago
> Beyond the actual amount insured by the FDIC? My understanding that everyone will receive anywhere from 70% to 90% of the uninsured parts of deposits eventually. Uninsured does not mean "... and it's gone". It rather means "best effort to get it back".
deleted 4y ago
[deleted]
zt 4y ago
Every bank account is insured up to $250K. Beyond that, customers have "uninsured deposits" But the FDIC is in the process of selling all the banks assets, which nearly cover all of their outstanding deposits. No one knows how much that difference will be right now. But companies should expect a lot more than just the minimally insured deposits back.
- dannyw 4y ago
  Nearly all? Their "held to maturity" portfolio was down 17% as of year-end 2022. Source: https://www.netinterest.co/p/the-demise-of-silicon-valley-bank https://www.netinterest.co/p/the-demise-of-silicon-valley-ba...
  - loeg 4y ago
    Yes, but before it was down, they had substantially more assets than deposits owed. > As of the end of December, SVB had roughly $209 billion in total assets and $175.4 billion in total deposits Say $80B of that is worth 83% of the HTM value on their balance sheet. That would be $14B less, or $195B in assets against $175B in deposits. I don't know the details of their holdings or exact difference between market prices and their HTM accounted value, but the important points are (1) they started with a lot more assets than deposits and (2) different portions of their balance sheet have declined different amounts. It's not all 10-year 1.5% MBS notes; only about $80B is.

jjtheblunt 4y ago

Where does the money come from? I mean that non-sarcastically, confess I've not figured out the way the banking system in the large works. edit : thanks all for coherent clear responses.

deleted 4y ago
[deleted]
runlevel1 4y ago
> Q. What is the source of funding used by the FDIC to pay insured depositors of a failed bank? > A. The FDIC's deposit insurance fund consists of premiums already paid by insured banks and interest earnings on its investment portfolio of U.S. Treasury securities. No federal or state tax revenues are involved. Source: https://www.fdic.gov/consumers/banking/facts/#:~:text=what%20is%20the%20source%20of%20funding https://www.fdic.gov/consumers/banking/facts/#:~:text=what%2...
- loeg 4y ago
  Well, no, that's only true if the bank doesn't have sufficient assets to cover secured deposits. Secured deposits were less than 10% of deposits at SVB and they have plenty of assets to cover that; the money comes from selling those assets. The only question is how much money uninsured depositors will get and where it will come from (selling the whole bank, or the assets individually).
- SoftTalker 4y ago
  > its investment portfolio of U.S. Treasury securities In other words, IOUs to itself, like the social security “fund”
- paxys 4y ago
  This isn't the answer to the question that was asked. Yes deposits up to $250K will be paid out using FDIC's normal insurance process (and will be available for all bank customers Monday morning). FDIC is also promising some portion of the remaining uninsured money sometime next week (the "advance dividend" they mention). The source of those funds is undetermined.

ellisv 4y ago

Yes but a week can be a long time. Startups trying to make payroll for the 15th might be in a tough spot.

markdown 4y ago
LOL, Silicon Valley tech workers aren't living hand to mouth, and they have credit cards. They'll survive a week without pay.
- zt 4y ago
  You underestimate how wide spread SVB's depositor base is and who all these "tech workers" are. SVB has offices in Georgia, North Carolina, three in Texas, etc, etc. A lot of them will have trouble if payroll isn't met (not to mention the company's legal obligations to pay people on time for work already done).
- ellisv 4y ago
  If your company doesn’t make payroll, how long would you keep working there? Most people don’t/won’t/shouldn’t work for IOUs.
  - wpietri 4y ago
    Everybody works for IOUs. It's just a question of how much credit you want to give them.
    - wpietri 4y ago
      Huh. From the downvotes, I'm confused. Does anybody get paid in advance? As far as I know, "do the work today, get paid soon" is how it works for basically everybody in the US.
      - ellisv 4y ago
        Almost no one is paid in advance. Most people expect to be paid on a regular schedule, e.g. biweekly, semimonthly, monthly. If you do the work and don’t get paid soon, what’s your expectation going forward?

dannyw 4y ago

Bill Ackman says ~50%: https://mobile.twitter.com/BillAckman/status/1634662286844411904 https://mobile.twitter.com/BillAckman/status/163466228684441... That should be enough for payroll, but not enough to spark a mass exodus from small and regional banks into the "systematically important banks" (ie too big to fail).

throwawaysleep 4y ago
What exactly is the individual risk of moving everything to big banks? Seems like a no brainer move to shift your cash to JPM, at least until this blows over.
- sjm-lbm 4y ago
  That's exactly the point: not guaranteeing deposits incentives everyone to move all their money beyond 250k into a big 4 bank as soon as they can on Monday morning. Great for JPM, but could be deadly for a huge section of the US banking industry.
  - wpietri 4y ago
    Unfortunately, guaranteeing deposits for everyone creates moral hazard, because it means people will not pay attention to the risk level of their bank, giving bank CEOs even more incentive to play "heads I win, tails they lose" with taxpayer money. I am all for FDIC insuring accounts, and I'm fine with the level being as high as $250k. But anybody with a lot of cash beyond that should already understand what the word "uninsured" means. If they don't my sympathy for them is limited. If we're going to spend billions more on improving the social safety net, people with hundreds of thousands of dollars in cash just lying around are not my first priority.
    - sjm-lbm 4y ago
      I really don't understand the moral hazard here. The people making risk decisions - ie, the SBV staff - should absolutely be wiped out. If there's a legal way to claw back the proceeds from the stock sales they made in the run up to the last few days, I wouldn't have a problem with that either.