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But if your neighbor’s house is currently burning down, you probably want the fire department to put it out before it spreads to your house…

• Jtsummers 4y ago
  Which is what's being done. Insured amount going out on Monday, dividends based on liquidation of assets going out over time. The fire is being managed, it's not like nothing is happening here. People are just pissed that the government and FDIC are doing what they've said they would do instead of something more, which was never promised.
  • flappyeagle 4y ago
    People are worried about what this means for confidence in regional banks. The prudent thing to do right now is to pull your money out of your regional bank and move it to a GSIB and call it a day. This endangers regional banks and concentrates deposits into the large players. You can stand your moral ground here or you can risk a string of bank runs and systemic collapse. It might not even make a difference anyways with how slow we’ve been to act.
    • mlyle 4y ago
      On the flipside, moral hazard is a real problem too. Setting the precedent that your regional bank can do whatever and you'll be just fine isn't great, either.
• mlyle 4y ago
  Yup. The federal government should get a dividend out beyond insurance ASAP if the bank is not acquired. They say "next week", but it should really be Monday or Tuesday. And it's OK even to incur a little bit of risk/uncertainty when doing so. But this is different from bailing out all the depositors 100%.