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1. Executives of SVB receiving bonuses. 2. Depositors that withdrew their money 100%. 3. Depositors that will fall under FDIC and made whole by this. 4. Depo
by hermannj314 4y ago
1. Executives of SVB receiving bonuses.
2. Depositors that withdrew their money 100%.
3. Depositors that will fall under FDIC and made whole by this.
4. Depositors that will receive X% of deposits (likely under 100%)
5. Debt and equity with SVB
6. American taxpayer.
OK, I think every possible permutation of who owes who money has been explained in this thread.
I personally would like to see a legal mechanism where group 2 owes group 4 money. Not sure how that would work, but it would definitely give no one an incentive to run on a bank ever again if we could figure it out.
- initplus 4y agoThe way to prevent bank runs is to prevent banks from becoming insolvent in the first place. Making it illegal to take funds out of an insolvent bank is not the answer.
- hermannj314 4y agoI think you can do both. However, when/if a bank becomes insolvent, it seems archaic that one depositor should get 100 cents on the dollar and another 80 on the dollar instead of each 90 (assuming equal accounts, etc.) Your place in line shouldn't really matter, these aren't Taylor Swift tickets.