5 ms·
> "Any losses to the Deposit Insurance Fund to support uninsured depositors will be recovered by a special assessment on banks, as required by law." Very curio
by ZachPruckowski 4y ago
> "Any losses to the Deposit Insurance Fund to support uninsured depositors will be recovered by a special assessment on banks, as required by law."
Very curious to see who ends up paying this special assessment. Are we all going to pay in lower deposit/investment interest from banks? Are bank shareholders/profits gonna eat it?
- loeg 4y agoThe balance sheet hole is likely to be relatively small. > Are we all going to pay in lower deposit/investment interest from banks? Are bank shareholders/profits gonna eat it? Some combination of this, I think.
- mskec 4y ago> Shareholders and certain unsecured debtholders will not be protected. Shareholders and bondholders will likely lose everything as nothing will be left after selling off assets.
- akavi 4y agoMy reading is that the "assessment" (tax) will be borne by all banks, not just the bank that fails. My gut says that the incidence will fall primarily on deposit holders (likely in the form of marginally lower interest rates), and not significantly on bank equity holders, but I suspect it'd take an econ phd to fully parse that out.
- ummonk 4y agoBank market caps had fallen something like 100 billion last week. Compared to that the cost of any special assessment will be miniscule.