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>Stepping in to smooth out systemic problems is another valid function Whether you consider this problem "systemic" is political. Note that the FDIC insurance
by nemothekid 4y ago
>Stepping in to smooth out systemic problems is another valid function
Whether you consider this problem "systemic" is political. Note that the FDIC insurance is not the point of contention here - it's whether depositors should be made hold especially if SVB's HTM securities are insolvent.
I could easily make an argument why student loan debt is a systemic issue in the united states - the government's guarantee of the loans as well as making them impossible to clear via bankruptcy has created both infinite demand (leading to higher tuition prices) and reckless loaning (due to the government essentially guaranteeing the loans). Why is this "systemic" issue unreasonable, while SVB is?
- christophilus 4y agoI don’t think depositors should be made whole if it can’t be done by a combination of managing the bank’s assets, and sale of depositors to other banks. So, if you’re saying neither the Fed nor the treasury nor the tax payers should bail out depositors, then I agree with you.