4 ms·
The 250k is messaging to minimize moral hazard. You want banks and depositors invested in minimizing their own risk. I'd guess hesitancy to immediately declare
by obventio56 4y ago
The 250k is messaging to minimize moral hazard. You want banks and depositors invested in minimizing their own risk.
I'd guess hesitancy to immediately declare full guarantee of funds is also due to these concerns (although there may be other reasons as well). The sweet spot here maximizes the appearance of consequences while minimizing actual fallout.
- m3kw9 4y agoBut now banks know is just a bluff?
- mrobins 4y agoIt’s not about the bank it’s about the depositors. The bank is still going to zero. It’s a valid Q how saving depositors impacts CFO risk analysis. Hopefully no matter what the outcome this scares everyone into diversification.
- thecus 4y agoThe consequences are the reduction of billions in shareholder value, and we shouldn't be dumb about doing anything that reduces confidence in US banks. SVB shareholders will be down from like 60 bln mkt cap during the pandemic to a good fat 0.