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> 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 alr
by 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 agoWell, 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 agoThis 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.