4 ms·
The bank isn't being bailed out though. The depositors are being covered by FDIC in the short term, while FDIC will sell assets seized from the bank. The bondho
by cmurf 4y ago
The bank isn't being bailed out though. The depositors are being covered by FDIC in the short term, while FDIC will sell assets seized from the bank. The bondholders and shareholders will take the haircuts. If that's not enough to cover the depositors, banks will be given a special assessment.
The banks left standing will be made to cover the deposits, insured or not, of other banks. It is rather remarkable and I'm not entirely certain it'll work - at what point the special assessment could be unsustainable. Presumably this special assessment isn't instant, and FDIC could just use accounting to make it politically and legally valid to consider it as a non-public and industry financed private bailout.
shrug will it work? I don't know. It really better.
- ricksunny 4y ago>_shrug_ will it work? I don't know. It really better The need to be able to field questions like these is why I feel we need open-source economic simultion packages. Does anyone think that people in the individual Fed reserve banks are running anything other than flat spreadsheets to model the financial system? Theyneed to develop economic modeling scripts (at minimum!) a field which is in its infancy. The datascience & modeling capability in HN would eclipse the forecasting power of an econometrics-focused Fed statistical modeling group. I briefly collaborated with a talented individual behind the Threadneedle economic simulation package. Here is her rubric on github for entering into this kind of work. https://github.com/jackymallett/Threadneedle/raw/master/Documentation/IntroToEconomicSimulation.pdf https://github.com/jackymallett/Threadneedle/raw/master/Docu... I'd like to see a python library devoted to economic modeling w/ classes for central banks, investent & retail banks, applied into umpteen think tanks' different competing models.