The assets are rolled into the new bank, to back the deposits. FDIC probably won't pay in very much in the end. https://www.fdic.gov/news/press-releases/2023/p

The assets are rolled into the new bank, to back the deposits. FDIC probably won't pay in very much in the end. https://www.fdic.gov/news/press-releases/2023/pr23019.html https://www.fdic.gov/news/press-releases/2023/pr23019.html Several banks were wiped out in 2008. Other banks exchanged large amounts of equity for government funds. Establishing systemic stability by injecting large amounts of government money was seen as better than letting the entire mortgage system collapse (which is what likely would have happened if all the banks holding mortgage backed securities were left to unwind). The shareholders didn't get off scot free, the government ended up their major partner and sold the assets for more than they had injected into the system (which doesn't necessarily represent a profit).