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> No losses associated with the resolution of Silicon Valley Bank will be borne by the taxpayer. i'm out of touch with how much of this works, can someone expl
by serf 4y ago
> No losses associated with the resolution of Silicon Valley Bank will be borne by the taxpayer.
i'm out of touch with how much of this works, can someone explain how this is paid without burden to the taxpayer?
- morelisp 4y agoIt's coming out of the insurance fund, which is paid into by banks. So the cost is still ultimately borne across a wider sphere, but not the government per se. (This is what's meant by "Any losses to the Deposit Insurance Fund to support uninsured depositors will be recovered by a special assessment on banks, as required by law.") The costs aren't borne by "the taxpayer", but an awful lot of taxpayers who had nothing to do with this or even purposely avoided it may be paying higher banking fees as a result.
- salawat 4y agoTranslation: cost is being bore by the taxpayer but people are staking out the stop posts on their analysis to avoid admitting it.
- yadoomerta 4y agoyupppp at least they have to pay lipservice now and not just printing billions and handing them straight to the rich
- arunabha 4y agoMentioned later in the announcement. > Any losses to the Deposit Insurance Fund to support uninsured depositors will be recovered by a special assessment on banks, as required by law.
- MuffinFlavored 4y agowhich banks will recoup by higher interest rates/fees? :P
- jakubadamw 4y agoNot an expert either, but this: > Any losses to the Deposit Insurance Fund to support uninsured depositors will be recovered by a special assessment on banks, as required by law. suggests other banks will effectively pick up the bill?
- pbhjpbhj 4y agoSo taxpayers will pay, but through their bank deposits and mortgages? It's hard not to see how this will be "private the profits, democratise the losses".
- temende 4y agoYes, every part of the economy is indirectly connected. Profits are also democratised via income and capital gains tax, even if it's not at a high enough level that people feel good about.
- anticensor 4y agoAnd by expenditure and reinvestment.
- xyzzyz 4y ago“Privatize the profits”? What are you talking about? The owners of SVB are wiped out, they will not see any profits, they lost their entire equity in SVB.
- ttymck 4y agoNo profits? None, ever? https://www.livemint.com/market/stock-market-news/svb-chief-greg-becker-sold-3-6-million-in-stock-days-before-bank-s-failure-11678493108814.html https://www.livemint.com/market/stock-market-news/svb-chief-...
- celestialcheese 4y agoYou think that won't get clawed back if there was something illegal? This isn't crypto, you can guarantee that these sales will be investigated extensively.
- deleted 4y ago[deleted]
- dathinab 4y agoBecause SVB lacks the liquidity to pay out the bank run but doesn't lack the assets, at least as long as you only pay out deposits (which is what they are doing i.e. "Shareholders and certain unsecured debtholders will not be protected."). The thing is that without this decision there would be two problems: 1. deposits would only re-accessable much later, too late for most small Companies to survive 2. depending on law/regulation aspects I don't know much about it also may have been a possibility that Stockholder get payed out first and similar
- AmericanOP 4y agoSVB has assets but not liquidity. This is not like 2008 where the assets themselves are worthless.
- YZF 4y agoAren't they (at least some large portion of the assets) mortgage backed securities, i.e the same sort of stuff like 2008? If the economy collapses and the housing market collapses then they can become worthless. Very different than lessay US government bonds. Right now they're worth their market value which right now isn't worthless but also isn't enough...