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> It seems to me that there is a considerable amount of risk to the participating banks if FRB fails. "Hold the line" is right - if more banks fail, these parti
by uCano1 4y ago
> It seems to me that there is a considerable amount of risk to the participating banks if FRB fails. "Hold the line" is right - if more banks fail, these participating banks will lose a lot more than their $1B each.
$5 billion each.
- pjc50 4y agoUp to $5bn. The actual likely value at risk is a lot smaller; would need a First Direct balance sheet to estimate it. (Some are subscribed at $1bn and some at $5bn. That must have been an interesting meeting.)
- lxgr 4y agoA 100% haircut would mean that their assets are effectively worthless. I highly doubt that the depositing banks would have done this if that were the case.
- bumby 4y agoEven if their assets are things like Treasury notes? I'm assuming JPM would get first dibs on those types of assets if First Republic went under, no?