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And 20 billion loss out of 57 billion deposits is quite the haircut. Would have been a terrible precedent to set to allow a run and then stick the saps that we
by treis 4y ago
And 20 billion loss out of 57 billion deposits is quite the haircut. Would have been a terrible precedent to set to allow a run and then stick the saps that were too slow with all the losses.
- JumpCrisscross 4y ago> 20 billion loss out of 57 billion deposits is quite the haircut First-Citizens is buying $72bn assets for $56bn. They're leaving behind "$90 billion in securities and other assets...in the receivership for disposition by the FDIC." Nobody would have been haircut.
- treis 4y agoThe press release says this is going to cost the FDIC ~20 billion. If they didn't shoulder that loss, who would have except for depositors?
- JumpCrisscross 4y ago> press release says this is going to cost the FDIC ~20 billion. If they didn't shoulder that loss, who would have except for depositors? I'm not familiar enough with FDIC jargon to know what this means. My guess is it's an accounting figure, incorporating the $16.5bn discount given to First-Citizens, not a cash outlay from the DIF, though the wording suggests the latter. (It may be a reference to the expected loss-sharing agreement outlay.)
- blitzar 4y agoCost of funding overnight to maturity? 90bn for 5 years @ -3% carry, +/- defaults / refi on loan book? ~= 20bn? Also total losses are FDIC + the already defauted on share capital + any bonds the bank had issued. The hole in the balance sheeet is a lot bigger than it first looked.
- bradleyjg 4y agoBetter to stick it to the saps that picked a better bank, eh?