quote:
The American people pay with higher bank fees and rising interest rates for loans.....meanwhile the banks pay their depositors .75% interest on a savings account while the Fed funds rate is over 5%.

You’re clueless. The spread you’re talking about is exactly why SVB (and almost all TBTF banks) had a liquidity problem. The treasuries they bought pay less than the current inflation rate, so they can’t pay out cash until those assets mature. If you closed the spread, the situation gets worse and will require more bailouts.

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Posted by EmmettFitzHume

Member since Dec 2023

10 posts

Posted on 2/21/24 at 10:11 am to Taxing Authority

quote:
The American people pay with higher bank fees and rising interest rates for loans.....meanwhile the banks pay their depositors .75% interest on a savings account while the Fed funds rate is over 5%.
You’re clueless. The spread you’re talking about is exactly why SVB (and almost all TBTF banks) had a liquidity problem. The treasuries they bought pay less than the current inflation rate, so they can’t pay out cash until those assets mature. If you closed the spread, the situation gets worse and will require more bailouts.

That's one reason why SVB failed. As rates increased depositors starting move out of traditional banking deposits and into money market funds. The tech industry money dried up therefore no new money coming in the door of SVB. Just matter of time before implosion.

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Posted by Bass Tiger

Member since Oct 2014

46487 posts

Posted on 2/21/24 at 10:15 am to Taxing Authority

quote:
quote:The American people pay with higher bank fees and rising interest rates for loans.....meanwhile the banks pay their depositors .75% interest on a savings account while the Fed funds rate is over 5%.You’re clueless. The spread you’re talking about is exactly why SVB (and almost all TBTF banks) had a liquidity problem. The treasuries they bought pay less than the current inflation rate, so they can’t pay out cash until those assets mature. If you closed the spread, the situation gets worse and will require more bailouts.

Your logic is the money that was pouring into SVB from who knows where (tens of billions of dollars) should not be subjected to FDIC limits? The wealthy elites praise you. You're the typical university educated banking/finance graduate who is very learned on the technical side but clueless on the ethical side.