If the problem is widespread enough to cause a systemic breakdown, the solution will inevitably be a bailout of some sort. The two largest issues will be how much of a haircut will depositors and shareholders have to suffer. Most likely, shareholders will get hit, but even large depositors will likely be made whole by the FDIC and the Fed.
FDIC and the Fed will pay nothing; it's the Taxpayers who will fund the bank's failures, with NO ACCOUTABILITY, as always, for the assholes that committed Fraud.
“ but even large depositors will likely be made whole by the FDIC and the Fed…”
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Maybe… but the FDIC insurance cap is $250,000 per depositor per account.
So it depends upon how deposits at the bank are “structured”. It’s individual depositors without financial savvy who could get burned.