Socialize the losses, privatize the gains.
It’s the Uniparty way.
bttt
“He is asking if Oklahoma community banks will get the same special assessment to be made whole.”
“1:40 a bank only gets that treatment if a 1:44 majority of the FDIC board a super 1:48 majority is super majority of the FED 1:51 board and I in consultation with the 1:55 president determine that the failure to 1:59 protect uninsured depositors would 2:02 create systemic risk and significant 2:06 economic and financial consequence”
Translated to vernacular English, I think that means “No, Oklahoma banks won’t get special treatment, because they’re not special to us.”
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This is stupid.
They could stop the contagion now. Or they could let it get worse until Oklahoma small and regional banks are being shut down.
Then Oklahoma’s small banks wouldn’t have to pay for other’s bailout. They’d need bailing out themselves after being shut down.
I know the GOP is the stupid party, but do we have to be SO stupid?
The best way to limit the contagion is to NOT rescue banks that operate at risk to their depositors, as SVB and Signatute bank did.
The simple “regulaors” word to people, to stem “contagion” is to say very simply, most banks were not taking the risks and making the investment error (most of the capital in low interrest rate long term government bonds) that SVB took and are not in the same bad position SVB was. Then SVB would declare bankruptcy and the bankruptcy court would look for a buyer and agree to the terms of a sale - who - investors, depositors, crediors has to take a “haircut” and how much. That would mean no funds from the Fed or the FDIC and no raising of FDIC fees (on all banks) to cover any “rescue”.
Lankford is correct in the moral banking error Yellin et all are making if UNINSURED depositors (deposits above $250,000) are being made whole by what the Fed and FDIC are doing for SVB, and while what they are doing will assess a special FDIC fee (to pay for it) on ALL banks, while uninsured depositors in all banks will not be made whole (insured). It spells protection if your bank it “too big to fail”, but otherwise not. And yes it will mean more banking consolidation with more money moving out of banks that are NOT “too big to fail”.
Sorry but Oklahoma community banks are not politically connected like SVB, so they are not entitled to a bailout.
The fact is that there probably won’t be any special assessment on banks.
I read in the history of FDIC bank takeovers, there has been only one bank Indymac where ALL depositors didn’t get all their money back.
I’d rather listen to 10 nails on a chalkboard, than listen to Yellen’s voice.
I watched the exchange and all I could think of is that Yellen is so far past her prime that she would need a step ladder to get up to sub prime. Seriously why do we have so many men and women in advanced age and mental incompetency in so many government positions that affect so many Americans?
Bump!
Clay and Buck hitting this hard this afternoon on the radio.