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FDIC accidentally reveals the Silicon Valley Bank depositors it bailed out (2023)
- terminalbraid 2y agoNote this article is dated June 23, 2023
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- rekttrader 2y agoNice that a human at the FDIC really either was incompetent or a fun whistleblower. Either way, glad to see how the money was spent.
- stogot 2y agoGlad? I’m more disappointed than I was before to see how the money was spent. Turns out Pence was right
- snypher 2y agoI wonder about the phrasing. To me, a bailout of a bank allows the bank to continue business. I think paying out customers and allowing the bank to fail doesn't quite qualify under my understanding. More of a bailout of the customers, if anything.
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- BoiledCabbage 2y agoI'll never forget all those Silicon Valley dyed-in-the-wool libertarians, the minute their assets wete at risk, were out there begging for socialism. Using every argument imaginable for why they need to be bailed out. Pure and absolute hypocrites.
- bankcust08385 2y agoSocialism for the rich when it affects them; deregulation, austerity, and price hikes for everyone else. Fun fact: The rich in America receive 2x as much help as social programs do, and that doesn't even count the pork MIC projects that is the defense budget. John Oliver even had a recent episode of how difficult it is to get Social Security. It took me 9 years and a lawyer. You're better off selling your organs than expecting any sort of help in America that doesn't treat you like a criminal at every opportunity.
- dmurray 2y agoThe FDIC found a buyer for the bank at zero without too much difficulty, so in hindsight the taxpayer's money wasn't actually spent here. Would it have been a better warning to haircut the depositors a token amount? Say "the FDIC has evaluated the business and agreed to assume everything up to $1m, and 99% of deposits above $1m/customer". That would mean no one actually suffers cashflow problems, but it would send the message that the next time, the depositors might not be so lucky, and they need to do a better job of assessing their banks' solvency.
- from-nibly 2y agoHow did the buyout work? Was the bank just temporarily illiquid and just need cashflow?
- ensignavenger 2y agoIf you want the details, it is laid out here- https://www.fdic.gov/news/speeches/2023/spmar2723.html https://www.fdic.gov/news/speeches/2023/spmar2723.html Skimming that and other sources, I could not confirm the assertion that no net money was spent bailing out depositors. If that was the case, then the FDIC wouldn't need to replenish their insurance fund.
- dmurray 2y agoI skimmed a couple of sources and thought I caught that First Citizens paid zero, net of some guarantees, for "all of SVB's assets and liabilities". That was wrong: it looks like the price was more like negative 16.5 billion [0] so that was the cost to the FDIC. I agree with other commentators that even if the price was zero and the guarantees to FCB were never tested, the taxpayers still paid money in expectation - they took a bet without getting paid for the potential downside. I don't really agree with characterizations [1] of the deposit insurance fund as "not being from the taxpayers" - a fee on bank deposits is in other countries described as a tax, and even if not, the DIF is at least backstopped by the taxpayer. [0] https://www.theguardian.com/business/2023/mar/27/silicon-valley-bank-bought-by-first-citizens https://www.theguardian.com/business/2023/mar/27/silicon-val... [1] https://apnews.com/article/svb-banks-fdic-first-citizen-silicon-f6958f1fa87b0991cb525b0424c7a1cd https://apnews.com/article/svb-banks-fdic-first-citizen-sili...
- nubinetwork 2y agoTencent and Bezos must be happy...
- ChrisArchitect 2y ago(2023) More discussion at the time: https://news.ycombinator.com/item?id=36445278 https://news.ycombinator.com/item?id=36445278
- mileyka 2y ago[dead]