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The 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?
by treis 4y ago
The 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.