Viewing a single comment thread. View all comments

Jeremycycles t1_jcgvv5y wrote

Reply to comment by [deleted] in First Republic in talks with major banks about a rescue plan by Powerpuff_Rangers

The FDIC may say they will guarantee everything over 250,000 but they literally just used all of their cash reserve to do it for a bank that isn't even in the top 15 largest in the US.

7

TheRealCabbageJack t1_jcgyhou wrote

Counterpoint: it’s depositors were all very very rich people. That is all.

16

hardolaf t1_jcizm5h wrote

Counterpoint, it's depositors were mostly relatively low net worth startups that employ hundreds of thousands of people who pay a lot in taxes.

4

InteractionNOVA2021 t1_jch8md9 wrote

The FDIC will require the other banks it insures to pay a special assessment to help pay for at least some of this depositor rescue. The same thing happened after the Banking Crisis of 2008. At that time, the premium was 20 cents for every $100 dollars of domestic deposits.

I also anticipate that the FDIC will recover a decent amount from the sale of SVB's assets. This isn't the typical situation in which the bank is burdened by a substantial portfolio of non-performing loans.

2

Jeremycycles t1_jch9i93 wrote

After the assets are sold. So right now if any regular Joe Schmo bank fails the regular people are fucked

3

InteractionNOVA2021 t1_jchciwq wrote

The Deposit Insurance Fund is backed by the U.S. Treasury. The FDIC was bailed out in the 1980's and again after the 2008 Banking Crisis. So, insured depositors are still protected.

−2

Jeremycycles t1_jchdcee wrote

False, the FDIC is not backed by the treasury but they do invest in treasury securities. The FDIC is completely funded by member banks.

7

Warmstar219 t1_jcirqwh wrote

And that, in turn, will be passed onto the people depositing at the bank.

2