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Any company with more than a couple dozen employees is going to have more than $250k in the bank for payday. SVB had some payroll processing companies as client
by sp332 3y ago
Any company with more than a couple dozen employees is going to have more than $250k in the bank for payday. SVB had some payroll processing companies as clients, so they each had multiple companies' payroll in the accounts that Friday. And the article mentions that the Cayman Islands branch had investment and private equity firms as clients, so they wouldn't get too far with only $250k in their accounts.
- epgui 3y agoAh… yes, well I don’t know anything about corporate banking. I was thinking about personal banking practices.
- deleted 3y ago[deleted]
- Retric 3y agoYou can use multiple banking accounts at multiple banks and still maintain FDIC protection. There’s many business models set up to facilitate such things, so while you can’t hold billions in this way in practice it’s not a problem for payroll. Ex: https://en.wikipedia.org/wiki/IntraFi_Network https://en.wikipedia.org/wiki/IntraFi_Network Alternatively, you can also buy your own insurance from a 3rd party to minimize risks. However, you can also get incentivized to ignore the risks and keep large sums at individual institutions. Which has the obvious downsides SVB customers are discovering.
- deleted 3y ago[deleted]
- HWR_14 3y agoAre many payroll companies doing business out of the Caymans? No. This was investment and private equity firms. They should take their losses.