Posted on 03/12/2023 7:14:06 PM PDT by Beave Meister
WASHINGTON — Plans announced Sunday to fully reimburse deposits made in the collapsed Silicon Valley Bank and the shuttered Signature Bank will rely on Wall Street and large financial institutions — not taxpayers — to foot the bill, Treasury officials said.
“For the banks that were put into receivership, the FDIC will use funds from the Deposit Insurance Fund to ensure that all of its depositors are made whole,” said a senior Treasury Department official, who spoke to reporters Sunday about the plan on the condition of anonymity.
(Excerpt) Read more at cnbc.com ...
Well there goes the pension fund...
The FDIC is going to be more undercapitalized going forward.
The FDIC premiums should be set to fund a systemic 10% asset shortage once every fifty years (or about .2% of deposits annually).
That aside, lawlessness, $250,00 is rule - now broken to protect the leftists in California….I would love to see the list of who they are bailing out in California.
Yes it WILL cost the taxpayers. It always does.
A bunch of leftist democrats
You have a business with 50 or more employees these days, and you'll probably need to have $250,000 in a liquid account just to cover your payroll every two weeks.
Yep, increased fees and reduced interest payments to bank customers to make up for increased FDIC fees. At some point you have flush out “malinvestment”...nothing learned from 2008...moral hazard continues.
What lies they tell with total audacity.
All this money comes from Americans, to bail out the woke connected scum who fund our politicians.
Sure, if Yellen says so.
https://freerepublic.com/focus/f-news/4137677/posts
The problem at Silicon Valley Bank is compounded by its relatively concentrated customer base. In its niche, its customers all know each other. And Silicon Valley Bank doesn’t have that many of them. As at the end of 2022, it had 37,466 deposit customers, each holding in excess of $250,000 per account. Great for referrals when business is booming, such concentration can magnify a feedback loop when conditions reverse.
The $250,000 threshold is in fact highly relevant. It represents the limit for deposit insurance. In aggregate those customers with balances greater than this account for $157 billion of Silicon Valley Bank’s deposit base, holding an average of $4.2 million on account each. The bank does have another 106,420 customers whose accounts are fully insured but they only control $4.8 billion of deposits. Compared with more consumer-oriented banks, Silicon Valley’s deposit base skews very heavily towards uninsured deposits. Out of its total $173 billion deposits at end 2022, $152 billion are uninsured.
What kind of connections do these depositors have?
Are they Chinese?
It seems that BoA and JP Morgan have to transfer AFS assets and probably cash to secure SVB. The question is how weak does that make BoA and JP Morgan? I’m not a customer of either, but if I were, I would be looking for a new bank tomorrow morning. I’m not waiting for the answer.
So they’re using the money that grows on trees.
How does the FDIC just ignore it’s $250,000 limit? Isn’t that set by law?
SVB in China
From what I have read, there are approximately a dozen Chinese businesses that have limited exposure, all less than 9% of cash deposits in SVG. Now, those pesky Sweds, they have huge exposure via a large pension fund. There’s a bunch of customers in the UK and India, the vast majority are tech startups.
The FED & Yellen said no taxpayer money would be used...yet the FED would make funds availble to banks to make sure they can meet depositor requests.(bank runs)
Where does the FED get the dough ?
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