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Would 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 fa
by ineedasername 4y ago
Would 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 4y 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 4y agoIn FR's case, 63-68% (I can't remember the exact number) of all accounts that withdrew were over the 250k limit.
- dymk 4y 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 4y 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 4y 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 4y 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.