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Likelihood that uninsured deposits will be made whole? What happened to the billions that larger banks "deposited" into FRB just a few short weeks ago?
by cypherpunks01 3y ago
Likelihood that uninsured deposits will be made whole? What happened to the billions that larger banks "deposited" into FRB just a few short weeks ago?
- loeg 3y agoThat's the interesting question, isn't it. Does the FDIC hose a bunch of depositors by taking over a zombie bank that could have ambled along for a while, or do they make everyone whole and kill the (dumb) industry of sweeping deposits into <=$250k accounts at many banks?
- Scoundreller 3y ago> kill the (dumb) industry of sweeping deposits into <=$250k accounts at many banks I like that system: it props up several banks instead of just one "winner-take-all" that does the most risk and externalizes the costs to uninsured depositors (and sometimes FDIC) when it blows up.
- loeg 3y agoThe alternative system doesn't have uninsured depositors at all. Arguably this could be better for the multitude of banks. It's mostly worse for the businesses offering sweep services for a fee / net interest margin.
- deleted 3y ago[deleted]
- unstatusthequo 3y agoI pulled it all out earlier this week. Under contract in house. So glad I did or I’d be at the mercy of the FDIC to get my closing funds. Hello, JPM.
- grogers 3y agoUltimately it will be the big banks paying more to the FDIC to cover the shortfall anyways. So that will be pretty much a wash either way. It's the non-bank uninsured depositors that matter.
- jacooper 3y agoAt this point banks shouldn't exist, just put your money with the feds. This article discusses this and highlights how disruptive it can be for the entire Economic system. https://jacobin.com/2023/04/svb-bank-runs-private-federal-reserve-deposits https://jacobin.com/2023/04/svb-bank-runs-private-federal-re...