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The FDIC is guaranteeing all SVB deposits, including deposits above $250k. Any deficit will be paid from the FDIC's insurance fund, which if necessary will be t
by tripletao 4y ago
The FDIC is guaranteeing all SVB deposits, including deposits above $250k. Any deficit will be paid from the FDIC's insurance fund, which if necessary will be topped up by a special assessment on all participating banks. So the losses (if any) won't be socialized over taxpayers, but they will be socialized over some combination of bank owners and customers.
https://www.federalreserve.gov/newsevents/pressreleases/monetary20230312b.htm https://www.federalreserve.gov/newsevents/pressreleases/mone...
- dragonwriter 4y ago> So the losses (if any) won’t be socialized over taxpayers, I mean, a “special assessment” is just a different word for a one-time tax, and it being directly on all banks and indirectly on everyone who banks, or does business with entities who bank, makes distinguishing the payers of this tax and “taxpayers” ludicrous hair-splitting.
- ralph84 4y agoExactly, the banks that practiced sound risk management get to subsidize the banks that didn’t. Textbook moral hazard.