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I don't see how you can call them scapegoats and that someone else is "saving face". That implies someone else did something wrong, and they're taking the blame
by creato 3y ago
I don't see how you can call them scapegoats and that someone else is "saving face". That implies someone else did something wrong, and they're taking the blame for it, so someone else doesn't look bad. What is that and who is that someone?
The management of SVB and FRB gambled and lost. They have no one to blame but themselves. Events that followed seemed like reasonable steps to take to clean up their mess.
- politician 3y agoWhen SVB failed, the deposits were guaranteed at 100%, for accounts that were far beyond the $250,000 limit. The money to guarantee those deposits came from the FDIC Insurance Fund. A special assessment -- a fee -- was charged to all other banks in the entire Federal Reserve system to refill the insurance fund. The Biden administration claims that this was not a bailout because taxpayers didn't pay to cover these deposits. Technically, he's right. Instead, bank customers ultimately performed the bailout. It's just the case that 99% of American taxpayers are also Federal Reserve bank customers. So, let's go back to your "gambled and lost" argument. SVB and FRB gambled, but I lost. You lost. Your neighbor lost. That person that doesn't have a bank account and the folks that had $400M USD in their SVB accounts didn't lose. The solution to force you and I to pay higher fees to fund a not-a-bailout for SVB depositors to prevent broader contagion was the right call, but to explain it away as merely affecting a small number of executives and shareholders is a lie.
- creato 3y agoThis doesn’t answer the question of who is being scapegoated or who is saving face or from what.