3 ms·
No bank in existence could handle losing 40% of their deposits in a few days. You can't possibly protect against that while also operating the business of being
by peter422 3y ago
No bank in existence could handle losing 40% of their deposits in a few days. You can't possibly protect against that while also operating the business of being a bank as we think of it.
- ineedasername 3y agoWould people panic & withdraw their deposits if the bank had been more cautious? That's the main question. It can't really be proven either way, but it seems fairly plausible that a bank with much less risk would have far fewer panicked depositors.
- dymk 3y agoDoubtful, as 99% of people aren't taking a detailed look at the bank's risk profile when they're deciding to withdraw their cash. It's a knee-jerk reaction to keep their money safe. After all, FR was actually safe, had their not been a run.
- xeromal 3y agoIn FR's case, 63-68% (I can't remember the exact number) of all accounts that withdrew were over the 250k limit.
- dymk 3y agoFDIC is not a "Limit up to $250k", it's "At least $250k", and the FDIC has in all cases made accountholders whole even past $250k.
- xeromal 3y agoThat is an unreasonable assumption for a company that has their payroll in an account for instance. It would be idiotic not to move it.
- peter422 3y agoIt is also amazing that is you look at the deposit numbers, almost none of the FDIC protected money moved, whereas almost all of the non-FDIC money went elsewhere. Maybe they erred in allowing all that FDIC uninsured money, but somebody would have to!
- xeromal 3y agoSounds like the people that could, stayed, while the ones who couldn't take the risk left. I'm a FR client and kept my money in because I'm under the limit. I wouldn't blame anyone who was over the limit for leaving.