3 ms·
> Yellen has just broadcast that FDIC insurance is essentially unlimited, as long as you can threaten wider disruption to the economy. You are almost certainly
by svnt 4y ago
> Yellen has just broadcast that FDIC insurance is essentially unlimited, as long as you can threaten wider disruption to the economy.
You are almost certainly misreading that signal. Probably since Friday they have assessed that the depositors can be covered once the assets can be liquidated, and that they may even be able to make money doing it.
If they can’t, they can assess the rest of the losses to the system, and those losses once divided up are likely to be inconsequential, even if not considered in relation to a broader run on the banking system.
- hellojesus 4y ago> Probably since Friday they have assessed that the depositors can be covered once the assets can be liquidated, and that they may even be able to make money doing it. The same assets that are yielding <4% interest against a market rate of 5%+ or 7%+ or whatever it is? Seems like it's going to take a long while before those papers are trading at or above cost when you account for inflationary devaluation and their yield horizon. There is certainly a cost here. The insolvency of the paper is the entire reason the bank failed in the first place.