4 ms·

These statements are incredibly vague and could mean anything. I certainly don't interpret them as that the US government has decided to pitch in additional mon

These statements are incredibly vague and could mean anything. I certainly don't interpret them as that the US government has decided to pitch in additional money, because if they have, it makes a whole lot of sense for them to explicitly, clearly and undeniably announce that: the whole goal of such an action would be to aid confidence in the financial system, and announcing that the US government is standing behind it with its full faith and credit is the best way they have to do that.

gnicholas 4y ago
There are not unambiguous statements, and the senator's statement is alone not sufficient to guarantee anything (he's one of 100 senators, to say nothing of the House). But if high level officials are making statements like these, it does tend to indicate that there's a significant chance that depositors will be looked after (perhaps not fully, but to some extent beyond the $250k FDIC limit).
- hnaccount_rng 4y ago
  Which they would have been _anyways_... Seriously, the FDIC insures 250k$ IF and only if the banks assets are insufficient for _that_. In other words, as long as SVB has enough assets to pay out 250k$ per ~account. All the FDIC is going to be doing is the administration [1] of the distribution. Whatever assets are left beyond the first n_accounts * 250k$ will be distributed among the account holders with extra balance. Some of _that_ money will also be distributed tomorrow morning. So in fact all depositors with more than 250k$ balance will be "looked after, but not made whole" TOMORROW. The question remains ,IF there aren't enough funds to make everyone completely whole, what happens then. There is _zero_ indication in those statements, that there would be money added to the pile that will be generated by the auction of SVB's assets. [1] not sure if there's a fee for that, but it would be negligible anyhow

gnicholas 4y ago

There are not unambiguous statements, and the senator's statement is alone not sufficient to guarantee anything (he's one of 100 senators, to say nothing of the House). But if high level officials are making statements like these, it does tend to indicate that there's a significant chance that depositors will be looked after (perhaps not fully, but to some extent beyond the $250k FDIC limit).

hnaccount_rng 4y ago
Which they would have been _anyways_... Seriously, the FDIC insures 250k$ IF and only if the banks assets are insufficient for _that_. In other words, as long as SVB has enough assets to pay out 250k$ per ~account. All the FDIC is going to be doing is the administration [1] of the distribution. Whatever assets are left beyond the first n_accounts * 250k$ will be distributed among the account holders with extra balance. Some of _that_ money will also be distributed tomorrow morning. So in fact all depositors with more than 250k$ balance will be "looked after, but not made whole" TOMORROW. The question remains ,IF there aren't enough funds to make everyone completely whole, what happens then. There is _zero_ indication in those statements, that there would be money added to the pile that will be generated by the auction of SVB's assets. [1] not sure if there's a fee for that, but it would be negligible anyhow