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> "I'm concerned you're ... encouraging anyone who has a large deposit at a community bank to say, 'we're not going to make you whole, but if you go to one of o
by dahdum 4y ago
> "I'm concerned you're ... encouraging anyone who has a large deposit at a community bank to say, 'we're not going to make you whole, but if you go to one of our preferred banks, we will make you whole.'"
"That's certainty not something that we're encouraging," Yellen replied.
They’re not encouraging people to act in their own self-interest while knowing full well that’s the reality they just created. I have to wonder where she tells her family and friends to bank?
- whateveracct 4y agoIt's not a "reality" it's a leap so many HNers are making do to goldfish memories and lack of nuance.
- dahdum 4y agoCould you explain further? By nuance do you mean the idea that they’re telling a “white lie” to keep smaller banks from overextending and intend to bail them out anyway? I do think that’s part of it, but it’s still going to cause capital flight.
- dahfizz 4y agoThe FDIC stepped in this one time, where's the guarantee they will step in every time to cover uninsured deposits?
- VagueMag 4y agoThe implication of the above is that they will not step in every time, but only when they decide (in what is surely a very transparent, consistent, and fair process) that the failing bank in question is "systemically important."