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The bank failed and is being liquidated. You want to punish depositors too? Those are discrete issues. Honoring deposits and winding down the company can be don
by digitaltrees 4y ago
The bank failed and is being liquidated. You want to punish depositors too? Those are discrete issues. Honoring deposits and winding down the company can be done at the same time.
There is no down side to backing deposits. Frankly it’s time for the FDIC to raise the ceiling on the guarantee and offer voluntary coverage for 100% of deposits.
- midoridensha 4y agoI disagree; if anything, they should lower the limits of coverage back to $100k. Anyone too stupid to diversify their savings across multiple banking institutions deserves to lose their money (over the limit) when the bank fails. Regular people with less than $100k in cash savings shouldn't have anything to worry about; that's why the FDIC exists. For people with a lot more money, it's not the taxpayer's job to protect them from their own stupidity. Any competent financial advisor (who high net-worth people should be using anyway) will tell them to diversify. And by keeping that much cash spread out over different institutions, risk overall is lowered, not just for the individual, but for the whole system.
- digitaltrees 4y agoHow is a venture backed company with $40m in capital supposed to diversify? How are you supposed to manage a business with all your funds scattered across 100 bank accounts? How are you going to accept payments, manage user log ins, api credentials. There are significant practical operational and technical blockers that you are ignoring.