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It’s generally not very controversial financial policy that prevents a financial contagion like 1929. A law was put in place in 1933 with a limit. If it didn’t
by bradleyjg 4y ago
It’s generally not very controversial financial policy that prevents a financial contagion like 1929.
A law was put in place in 1933 with a limit. If it didn’t have a limit, we wouldn’t be having this discussion.
Where were all these billionaires and VCs any time prior to this calling for uncapped FDIC insurance? This is special pleading.
- softwaredoug 4y agoIt’s not about “billionaires” (who don’t keep billions of cash sitting in one bank) but the company with a few million that needs to make payroll and pay vendors. SVB is in receivership where depositors place very highly. Banking policy is not just about insurance. That’s just one tool.
- bradleyjg 4y agoBillionaires and VCs are going on Twitter and demanding a make whole government bailout. Is this the first time they are hearing about how the FDIC works? I don’t think anyone is opposed to the system playing out like it’s supposed to. The FDIC pays out $250k on Monday plus pro rata whatever cash is on hand. Then it starts selling assets. The treasuries and MBSs they can probably sell within days, those have very liquid markets. That will allow them to make another pro rata distribution. The loan book will take longer. But as long as public money isn’t used, no one will call it bailout.