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Not really - rewriting the rules (FDIC insurance limits) midway through because SVB's own depositors yelled "bank run!" loud enough is still moral hazard. Do I
by Aaronontheweb 4y ago
Not really - rewriting the rules (FDIC insurance limits) midway through because SVB's own depositors yelled "bank run!" loud enough is still moral hazard. Do I need to make sure I bank with an institution that Jason Calcanis, Mark Cuban, et al use so I can insure my deposits with their political / popular leverage?
- criley2 4y agoIt's hardly a rewrite, everyone knows that your deposits with the big 5 are already 100% "too big too fail" anyway. The only change is that some smaller organizations might also get the same unspoken benefit that the big 5 already enjoy. This keeps them competitive, and as the US Gov and many folks noted, if they did not do this, everyone would flee to the Big 5 and regional/community banking would be wiped out.