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Or you could split it between two banks and reduce your exposure by half. Four banks and you reduce it by 75%. That way a deathblow turns into a setback, and
by scottLobster 4y ago
Or you could split it between two banks and reduce your exposure by half. Four banks and you reduce it by 75%. That way a deathblow turns into a setback, and overhead is minimal. There are cash management services that will do this for you if you can't be personally bothered.
Running a business means doing the maintenance keeping ship afloat as well as charting a course to exotic destinations.
- mikeyouse 4y agoThose probabilities assume there’s an equal likelihood of going under for each bank which certainly isn’t true. I could just move it to half at WFB and half at JPM and cut my risk by substantially more than spreading it across random community banks.
- gnicholas 4y agoIf I split between SVB and FRB, have I reduced my exposure by half? I agree with GP that using a too-big-to-fail bank seems to be the more practical option.