4 ms·

Well you are bailing out unsecured depositors who should have known what they were doing.

by zzleeper 4y ago

colinmorelli 4y ago
It is absolutely in the collective market's best interest to retain confidence in the bank infrastructure of the nation. There were already people lining up at First Republic over the weekend, Signature Bank was shut down as part of this same announcement, and almost certainly more would have come in the following week. The collapse of a ~$200B bank was going to have significant ripple effects that would almost certainly have exceeded the fees that banks will pay to fill in any shortfall resulting from this backstop, whether they're ultimately charged down to account holders or not.
ITB 4y ago
Why are people so freaking obsessed with passing responsibility onto depositors. It’s perfectly reasonable for the government to be responsible for protecting money as property, just like we do with every other property. Unlike a house which needs maintenance, money is a virtual good. There’s nothing I should have to do to maintain my claim on my bank account.
- college_physics 4y ago
  > There’s nothing I should have to do to maintain my claim on my bank account. Thats a wrong statement. You are thinking of money as a public good and thats how it should be, but thats not what it is now. Your claim is against a private enterprize. You could have access to risk free sovereign money with the central bank and its entirely possible. But private banks are livid against it because it would deprive them of precisely the kind of game that blew up in their face with rising interest rates and discounted government securities. Ultimately this is not about idiot VC depositors and whether they deserve a haircut or not. Its about idiot bank managers and whether they deserve extracting rents from the entire economy doing basically nothing.

4 ms·

Well you are bailing out unsecured depositors who should have known what they were doing.

by zzleeper 4y ago

Well you are bailing out unsecured depositors who should have known what they were doing.

colinmorelli 4y ago
It is absolutely in the collective market's best interest to retain confidence in the bank infrastructure of the nation. There were already people lining up at First Republic over the weekend, Signature Bank was shut down as part of this same announcement, and almost certainly more would have come in the following week. The collapse of a ~$200B bank was going to have significant ripple effects that would almost certainly have exceeded the fees that banks will pay to fill in any shortfall resulting from this backstop, whether they're ultimately charged down to account holders or not.
ITB 4y ago
Why are people so freaking obsessed with passing responsibility onto depositors. It’s perfectly reasonable for the government to be responsible for protecting money as property, just like we do with every other property. Unlike a house which needs maintenance, money is a virtual good. There’s nothing I should have to do to maintain my claim on my bank account.
- college_physics 4y ago
  > There’s nothing I should have to do to maintain my claim on my bank account. Thats a wrong statement. You are thinking of money as a public good and thats how it should be, but thats not what it is now. Your claim is against a private enterprize. You could have access to risk free sovereign money with the central bank and its entirely possible. But private banks are livid against it because it would deprive them of precisely the kind of game that blew up in their face with rising interest rates and discounted government securities. Ultimately this is not about idiot VC depositors and whether they deserve a haircut or not. Its about idiot bank managers and whether they deserve extracting rents from the entire economy doing basically nothing.