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Bailing out the depositors is still a bailout.
by bradleyjg 4y ago
Bailing out the depositors is still a bailout.
- remote_phone 4y agoThe only depositors at risk at startups. All regular people are made whole. And they are getting ~50% of their holdings in the next week. Why are VCs clambering for a bailout? The system works as designed. No need to do anything else above and beyond.
- chewbacha 4y agoIt’s an insurance payout, not a bailout. If someone totals my car the insurance doesn’t say “well, that’s the risk of owning a car” and pay nothing. Insurance exists for these scenarios.
- bradleyjg 4y agoThe insurance had an explicit policy limit. That’s what the premiums were based on. Up to $250k per depositor isn’t a bailout. A penny above that is.
- thehappypm 4y agoDepends where the money is coming from. SVB has lots of assets — clearly not enough cash on hand for a bank run but they have lots of assets. Once those are liquidized depositors should get as much of their fair share as possible.
- 206lol 4y agoIt's likely SVB has assets in excess of $250k per account. So if they are sold, I'd expect depositors to get at least $250k and possibly more, depending on how those assets are sold. It only becomes a bailout if the government pays beyond the sale of svb's assets.
- bradleyjg 4y agoYep, we are on the same page. No issue with an orderly, open market asset sale and pro rata distribution. That’s how the system is supposed to work.
- nonethewiser 4y agoTautology
- a13n 4y agoI don't agree. Depositors aren't necessarily at risk of bankruptcy/collapse. Depositors wouldn't be bailed out. Depositors would be made whole. SIVB is 100% at risk of bankruptcy/collapse. Saving SIVB would be a bailout for sure.