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Main Street is bailing out risky banks again; this time it's Menlo Park instead of Wall St
Posted on 3/13/23 at 8:40 am
Posted on 3/13/23 at 8:40 am
Did your bank make stupid decisions? Did you keep well over $250K (the FDIC insured limit) in your bank? Doesn't matter - they are going to pay these special assessments and pass the costs on to you.
But it's okay because you aren't bailing them out directly.
But it's okay because you aren't bailing them out directly.
quote:
Signature Bank—a New York-based bank that previously focused on cryptocurrency—was also shut down by state regulators, marking the second crypto-friendly financial institution to fail in recent weeks, after Silvergate Bank. The Treasury said “all depositors of this institution will be made whole” through a program similar to Silicon Valley Bank’s rescue package.
quote:
Silicon Valley Bank was one of the 20 largest banks in the country before it crashed Friday, following a bank run that came after the Federal Reserve's interest rate hikes hurt the value of its assets and caused depositors to withdraw funds. Its demise marks the biggest bank failure in the U.S. since the 2008 financial crisis, sparking fears the crash could create issues at other similarly sized financial institutions like First Republic Bank. Meanwhile, many of the bank’s clients were tech startups, and its failure impacted the already hurting industry. Treasury Secretary Janet Yellen said Sunday federal officials were working to help Silicon Valley Bank’s depositors, but added that a bailout of the bank’s investors isn’t necessary, in part because this situation is less severe than the Great Recession. “The American banking system is really safe and well-capitalized, it's resilient,” she told CBS.
quote:
$151.6 billion. That’s the total amount of uninsured U.S. deposits held by Silicon Valley Bank, making up the vast majority of the bank’s deposits as of December, according to FDIC filings.
quote:
Taxpayers will not foot the bill for the rescue plan: The banks that fund the deposit insurance system will pay for any losses incurred from protecting Silicon Valley Bank’s uninsured depositors, with the FDIC charging them a “special assessment,” according to the Treasury.
LINK
This post was edited on 3/13/23 at 8:42 am
11
Posted on 3/13/23 at 8:44 am to frequent flyer
quote:
$151.6 billion. That’s the total amount of uninsured U.S. deposits held by Silicon Valley Bank
They don’t sound uninsured to me.
Posted on 3/13/23 at 8:44 am to frequent flyer
Thank Goodness. I was worried they might pass those costs on to their customers and the taxpayers. Whew ! So relieved! Government regulators save us again ! Thanks wise sages !
Posted on 3/13/23 at 8:46 am to High C
quote:
They don’t sound uninsured to me.
Just more accounting tricks
Posted on 3/13/23 at 8:47 am to frequent flyer
Yep. It's a corrupt system, and it's infuriating that flyover country has to backstop people who were foolish with their cash yet again.
FDIC insures up to $250K. So most individuals are covered and will have access to their cash today, which is great From there, the FDIC needs to liquidate and sell off assets of SVB to PNC, Regions, Fifth/Third and whoever else might want it. That liquidity should be used to make depositors beyond the FDIC limits whole. Any shortfall from that should be written off as a hard lesson learned.
FDIC insures up to $250K. So most individuals are covered and will have access to their cash today, which is great From there, the FDIC needs to liquidate and sell off assets of SVB to PNC, Regions, Fifth/Third and whoever else might want it. That liquidity should be used to make depositors beyond the FDIC limits whole. Any shortfall from that should be written off as a hard lesson learned.
Posted on 3/13/23 at 8:52 am to frequent flyer
You can tell a lot of people are worried. If you just go to Google and type “Are banks” you see predicted results like: “Are banks collapsing?” or “Are other banks going to collapse?”.
Posted on 3/13/23 at 8:57 am to dewster
quote:
great From there, the FDIC needs to liquidate and sell off assets of SVB to PNC, Regions, Fifth/Third and whoever else might want it. That liquidity should be used to make depositors beyond the FDIC limits whole. Any shortfall from that should be written off as a hard lesson learned.
I mean this is pretty much exactly what's going to happen.
The plan to support deposits over $250k is mostly psychological to prevent other runs
Posted on 3/13/23 at 8:58 am to dewster
quote:
FDIC insures up to $250K. So most individuals are covered and will have access to their cash today, which is great From there, the FDIC needs to liquidate and sell off assets of SVB to PNC, Regions, Fifth/Third and whoever else might want it. That liquidity should be used to make depositors beyond the FDIC limits whole. Any shortfall from that should be written off as a hard lesson learned.
That is what is going to happen.
This isn't a taxpayer bailout of depositors.
Posted on 3/13/23 at 8:58 am to SlowFlowPro
quote:
I mean this is pretty much exactly what's going to happen.
The plan to support deposits over $250k is mostly psychological to prevent other runs
And they are charging other FDIC insured banks special fees to cover the gap. Read the articles posted about this.
And that special assessment will get passed onto the customers of those banks.
Just because it's indirectly coming from taxpayers instead of directly coming from taxpayers doesn't mean it's not a bail out. It's very much a bail out.
Posted on 3/13/23 at 8:59 am to GetCocky11
quote:
That is what is going to happen.
This isn't a taxpayer bailout of depositors.
Except for this:
the banks that fund the deposit insurance system will pay for any losses incurred from protecting Silicon Valley Bank’s uninsured depositors, with the FDIC charging them a “special assessment,” according to the Treasury.
Posted on 3/13/23 at 9:00 am to goofball
quote:
And they are charging other FDIC insured banks special fees to cover the gap.
a. I'm sure the banks are all for this to protect their own bank.
b. Ultimately these fees are likely paid for by the liquidation. It will just take time.
quote:
hat special assessment will get passed onto the customers of those banks
LINK?
Posted on 3/13/23 at 9:00 am to Roll Tide Ravens
quote:
You can tell a lot of people are worried. If you just go to Google and type “Are banks” you see predicted results like: “Are banks collapsing?” or “Are other banks going to collapse?”.
It’s social media stupidity. If the banking system in America collapses the whole world is fricked.
Posted on 3/13/23 at 9:00 am to frequent flyer
quote:
Taxpayers will not foot the bill for the rescue plan: The banks that fund the deposit insurance system will pay for any losses incurred from protecting Silicon Valley Bank’s uninsured depositors, with the FDIC charging them a “special assessment,” according to the Treasury.
Everyone cheering this on and congratulating each other on a job well done is ignoring this part.
It directly contradicts the whole "taxpayers aren't bailing them out" matra. This absolutely will get passed on to customers of banks that actually had their shite together.
Posted on 3/13/23 at 9:01 am to frequent flyer
this is fricking bullshite. everyone should be up in arms over this but instead most people are content with getting crumbs from our corrupt government table
Posted on 3/13/23 at 9:02 am to frequent flyer
Someone posted an article here yesterday that specifically said it wouldn’t be the taxpayers that ate the shite sandwich this time, it would be investors and creditors. That’s exactly who should and needs to feel the pain because that’s how you reduce the odds of this happening again. Hopefully they actually go through with that plan.
Posted on 3/13/23 at 9:03 am to frequent flyer
I seem to recall some pundit (years ago) warning about these giant banks and the problems that will occur when one fails.
Posted on 3/13/23 at 9:04 am to frequent flyer
Pretty sure OP knows he is literally posting fake news
Posted on 3/13/23 at 9:05 am to geauxtigers87
quote:
everyone should be up in arms over this
The alternative is potential collapse of civilization
Posted on 3/13/23 at 9:05 am to SlowFlowPro
quote:
The alternative is potential collapse of civilization
Just kicking it down the road.
Posted on 3/13/23 at 9:05 am to SlowFlowPro
Listen to All-In. SVB has a bunch of garbage venture-capital debt loans to VC-backed startups that will never be collected.
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