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https://www.businessinsider.com/why-silicon-valley-bank-customers-were-bailed-out-2023-3 https://www.businessinsider.com/why-silicon-valley-bank-cust...
by dist-epoch 2y ago
https://www.businessinsider.com/why-silicon-valley-bank-customers-were-bailed-out-2023-3 https://www.businessinsider.com/why-silicon-valley-bank-cust...
- mmooss 2y agoThe article itself says: Did the government bail out Silicon Valley Bank? No. SVB was closed by regulators, and is now under the control of the FDIC. When a bank fails, this is the government agency that ensures depositors get access to their money. Shareholders will get wiped out, and management has been removed.
- dist-epoch 2y agoFDIC has limits. They were not respected, everybody was made whole. $150 billion of uninsured money was bailed out by the government. > So, the FDIC, the Fed and the Treasury Department decided to go big and guarantee all SVB's deposits, even the roughly $150 billion that was supposed to be uninsured. > Shareholders were wiped out. Sure, but all the depositors were bailed out, which is what bailing out a bank means.
- mmooss 2y ago> all the depositors were bailed out, which is what bailing out a bank means Not at all. Bailing out a bank means funding the corporation, its owners, and its management to continue their operations. In this case, as the GP makes clear, the corporation was acquired by another financial institution, its owners lost all their money, and the management was fired.
- dist-epoch 2y ago> A bank bailout is when resources are dedicated to a struggling entity to prevent collapse, preceding bank failure. > Silicon Valley Bank and Signature Bank remain two of the largest bank bailouts in American history, with the U.S. government covering all taxpayer deposits but not supporting investors in the bank will not be protected. https://www.bankrate.com/banking/what-is-a-bank-bailout/ https://www.bankrate.com/banking/what-is-a-bank-bailout/