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My point was that banks are still useful because they get federal deposit insurance, while Silicon Valley startups apparently don't.
by pc2g4d 12y ago
My point was that banks are still useful because they get federal deposit insurance, while Silicon Valley startups apparently don't.
- ensignavenger 12y agoI don't see any reasons why a silicon valley startup couldn't. Lots of small bank startups sprout up all over the country. Also, Simple.com was a startup (they are now part of a very large bank) that got FDIC insurance through a partner bank.
- prostoalex 12y agoIn theory it shouldn't be too hard for a private insurance company to develop a similar product if there was enough interest from startups.
- setpatchaddress 12y agoI'd love to hear you expound on that theory. I find it really unlikely that anyone would trust a private corporation in that role.
- prostoalex 12y agoPrivate corporations already underwrite bonds (and related debt products like pensions, corporate loans, annuities or mortgages). A deposit in a bank is not completely different from a customer loaning money to the banking institution (at low or zero interest) in exchange for on-demand funds availability.