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If you were caught holding $1 million in investor funds designated to pay your employees salaries for the next X months and you learned there was a real risk of
by lowkey 4y ago
If you were caught holding $1 million in investor funds designated to pay your employees salaries for the next X months and you learned there was a real risk of your bank failing.
Knowing that only $250k of those funds were FDIC insured, would you have left your funds in the bank and hoped for the best?
If you answered Yes, how would you explain your decision to your investors or employees?
- vlovich123 4y agoMaybe you should have kept it in a managed money market account instead of a savings account? FDIC limits aren’t some mysterious new thing and businesses do have other options available.
- lowkey 4y agoSure, that would have been ideal in hindsight but based on the scenario I described above, I would argue that the depositor is simply being prudent to withdraw their funds from a bank if they are concerned about it’s stability. There is zero benefit for them to take the risk of leaving their funds with the bank and considerable downside.