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The FAQ says: > All transferred deposits will be separately insured from any accounts you may already have at First–Citizens Bank & Trust Company for at least

The FAQ says: > All transferred deposits will be separately insured from any accounts you may already have at First–Citizens Bank & Trust Company for at least six months after the failure of Silicon Valley Bank. That suggests that there is not going to be a reduction in coverage of FDIC insurance. Separately the Federal Reserve’s lending facility makes it unlikely that the same sort of long-duration treasury notes will bring down a bank. But yeah, it’s a good point that they did not explicitly spell out what sort of insurance is available for the transferred deposits.

laser 4y ago
Thanks! Still not clear to me if that extends beyond $250K or just not counting against an existing account held there, though. But as mentioned above they probably can just liquidate what they just bought if they need to meet large portion of deposits withdrawn. And the par value repo thing for stuff they already have makes sense would mitigate a run causing insolvency.
- shapefrog 4y ago
  > Still not clear to me if that extends beyond $250K It does not. The deposit insurance limit was $250k before the svb collapse, it was unlimited while the (government) fdic held your account, and now it has been transfered back to a private institution it is 250k again. <Insert "it always was" meme here>
  - notch898a 4y ago
    Only after bank failure can you truly determine what your FDIC insurance limit was. Per Yellen's own admission it is decided by several committees after the bank fails how to retroactively apply the variable insurance, depending on whether they deemed it "systematic." Of course if the depositors are mostly politically connected VCs or investments of politically connected VCs you probably have a better shot of being deemed systematically important.
    - shapefrog 4y ago
      "it always was"
    - deleted 4y ago
      [deleted]
  - s1artibartfast 4y ago
    This is the simple difference between a guaranteed minimum and a discretionary maximum. In practice, FDIC covers at least 250k
CTDOCodebases 4y ago
It's kind of ironic that the existing fist-citizen customers are actually second class citizens when it comes to having their deposits insured.
- q7xvh97o2pDhNrh 4y ago
  Well, sure. If you want first-class treatment, you have to go to Zeroth Citizens' Bank.
  - goldenkey 4y ago
    I heard that only reptiles can bank there.
- frankfrankfrank 4y ago
  Is it ironic though? The whole system is inverted in that way that citizens are second class, and failure is rewarded and the injured punished, aka fraud. It’s a system that simply cannot go well for the majority of people even if the top continues their plunder and walks away with everyone else’s chips. It’s not an ironic bug if the intentions of the features are nefarious.
  - arcticbull 4y ago
    > Is it ironic though? The whole system is inverted in that way that citizens are second class, and failure is rewarded and the injured punished, aka fraud. Who exactly got rewarded here? Not the bank shareholders, not their management - only depositors got protected, aka the system actually worked for once. > It’s a system that simply cannot go well for the majority of people even if the top continues their plunder and walks away with everyone else’s chips. This simply did not happen here. It happens a lot. It didn't happen here.
    - machina_ex_deus 4y ago
      The banks got to play and invest that money off those depositors. The investment was in government bonds. So essentially, the government got to use those depositors money, and then turned around and gave them back their money. Oh and it also inflated away the value of that money. If you think this is capitalism or the system working properly, you're deeply wrong. Finally, if this thing didn't blow up, those depositors would've seen none of the profits from lending to the government which is clearly a risky business. This is the same old story, governments printing money. This time they held hostages as they were printing their money. Almost like Money heist. Funnily enough, the narrative is so strong they are somehow the heroes. Maybe because people can't understand that inflating money is stealing.

laser 4y ago

Thanks! Still not clear to me if that extends beyond $250K or just not counting against an existing account held there, though. But as mentioned above they probably can just liquidate what they just bought if they need to meet large portion of deposits withdrawn. And the par value repo thing for stuff they already have makes sense would mitigate a run causing insolvency.

shapefrog 4y ago
> Still not clear to me if that extends beyond $250K It does not. The deposit insurance limit was $250k before the svb collapse, it was unlimited while the (government) fdic held your account, and now it has been transfered back to a private institution it is 250k again. <Insert "it always was" meme here>
- notch898a 4y ago
  Only after bank failure can you truly determine what your FDIC insurance limit was. Per Yellen's own admission it is decided by several committees after the bank fails how to retroactively apply the variable insurance, depending on whether they deemed it "systematic." Of course if the depositors are mostly politically connected VCs or investments of politically connected VCs you probably have a better shot of being deemed systematically important.
  - shapefrog 4y ago
    "it always was"
  - deleted 4y ago
    [deleted]
- s1artibartfast 4y ago
  This is the simple difference between a guaranteed minimum and a discretionary maximum. In practice, FDIC covers at least 250k

CTDOCodebases 4y ago

It's kind of ironic that the existing fist-citizen customers are actually second class citizens when it comes to having their deposits insured.

q7xvh97o2pDhNrh 4y ago
Well, sure. If you want first-class treatment, you have to go to Zeroth Citizens' Bank.
- goldenkey 4y ago
  I heard that only reptiles can bank there.
frankfrankfrank 4y ago
Is it ironic though? The whole system is inverted in that way that citizens are second class, and failure is rewarded and the injured punished, aka fraud. It’s a system that simply cannot go well for the majority of people even if the top continues their plunder and walks away with everyone else’s chips. It’s not an ironic bug if the intentions of the features are nefarious.
- arcticbull 4y ago
  > Is it ironic though? The whole system is inverted in that way that citizens are second class, and failure is rewarded and the injured punished, aka fraud. Who exactly got rewarded here? Not the bank shareholders, not their management - only depositors got protected, aka the system actually worked for once. > It’s a system that simply cannot go well for the majority of people even if the top continues their plunder and walks away with everyone else’s chips. This simply did not happen here. It happens a lot. It didn't happen here.
  - machina_ex_deus 4y ago
    The banks got to play and invest that money off those depositors. The investment was in government bonds. So essentially, the government got to use those depositors money, and then turned around and gave them back their money. Oh and it also inflated away the value of that money. If you think this is capitalism or the system working properly, you're deeply wrong. Finally, if this thing didn't blow up, those depositors would've seen none of the profits from lending to the government which is clearly a risky business. This is the same old story, governments printing money. This time they held hostages as they were printing their money. Almost like Money heist. Funnily enough, the narrative is so strong they are somehow the heroes. Maybe because people can't understand that inflating money is stealing.