Normal accounts are FDIC insured to $250,000.
So how is it people with normal checking/savings accounts will lose their money if BofA dies?
What makes you think the FDIC has any money?
All those banks they have been closing? Since 2008?
The government would have to back up the FDIC.
That is why the FDIC was against it. The derivatives are bigger than the FDIC.
The FED’s won, and they want their bailout. One way or another.
Normal people used to mean taxpayers, but for the 47%, it means their tax money goes to pay back those who have assets in insured accounts, as all those assets just got soaked up by paying off the parties to the derivatives. Remember, you don't put your money into a bank, you loan it to the bank to do whatever it please, with the understanding that you can call that loan at any moment. (liquidity of account.)
The fewer assets in the bank when it implodes, the less of a payout the taxpayers have to do, unless Congress suddenly wakes up tomorrow and forbids the taking of FDIC insured assets to pay derivatives. Which won't happen, I'm sure. Too many liberals (R or D) want to give another boon to the banks.
Deposits on a failing bank are guaranteed through fees collected by the FDIC. The FDIC can probably pay these, or with some help from the general fund.
The big question is what happens to all the other obligations of BofA. Will these get paid by the government as BofA gets unwound? If so, then having FDIC insured deposits is meaningless, as they will have to tax you in order to get the money to pay off the derivatives, or print money and pay the derivative payoffs with inflated money, making the value of the guaranteed deposits worthless through inflation.
They will claim that the right hand paid everything, but the left hand will be picking your pockets.