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 ...
Yes the feds halted the complete sale by FDIC for Silicon Valley Bank sell.
aka another back room highest bidder gig many other banks are bidding too.
Anyone seen Hunter around?.
SVB execs were way too risky with their investments...way too much money in “AFS” (available for sale) bonds and not enough in “held-to-maturity” (HTM) bond assets. Other more responsible banks shifted their bond portfolio to heavy on HTM. Plus they held far too little in cash reserves (”fractional reserve banking” come home to roost again like 2008). The new Fed bank reserve requirements are now 0, zip, nada (used to be 10%). We need to go the other way on reserve requirements...a “full reserve bank” might be popular!
Backstopping banks like this just encourages future bad behavior/dangerous risk taking -—>”moral hazard”.
https://freerepublic.com/focus/f-news/4137677/posts
https://www.federalreserve.gov/monetarypolicy/reservereq.htm
Sounds like a real money maker.
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