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the "gain" startups were getting was a deposit account that doesn't disappear over the weekend. these were not supposed to be high risk/reward investments.
by dyno12345 4y ago
the "gain" startups were getting was a deposit account that doesn't disappear over the weekend. these were not supposed to be high risk/reward investments.
- jonhohle 4y agoThe risk was not having insured themselves beyond what FDIC was providing. I can’t wait until my insurer covers hundreds of multiples above the coverage I have!
- dyno12345 4y agothe FDIC limit was a minimum. for decades the FDIC has covered the full amount in practice. if the current level of fees aren't enough to cover that, they will raise them. and that is exactly what is happening now.
- jonhohle 4y agoThat is not what is happening now. They are assessing additional fees under systemic risk protection rules. FDIC rates are changed on a regular, periodic basis with forewarning time for markets to adjust, not over a weekend. When has FDIC reimbursed more than the “up to” limit? Everything I’ve read regarding this suggests that this may be moral hazard, at least in the short term. The remaining amount should come from liquidation of the failed bank’s assets or by the acquiring bank, not the FDIC.