Free Republic
Browse · Search
News/Activism
Topics · Post Article

To: beancounter13
It’s time to let the bank fail, and let the stupid depositors lose everything over the FDIC threshold.

Businesses are not stupid depositors - they have to keep millions in liquid cash somewhere to cover payroll and operations. Putting it in 50 different backs to try to stay under the FDIC limit is extremely counterproductive.

The problem is - retail banking is a utility function, and safety of deposits is paramount. Retail banking needs a hard and impenetrable firewall between its operations and the speculative ventures of investment banking. Which it had until 1999, when Phil Gramm and the Republicans insisted on repealing Glass-Steagall and letting the gamblers loose.

Every medium and large company is now forced into partnership with some speculator or another, and just has to hope the management can restrain its impulses far enough to keep its depositors relatively safe.

The likely solution is to just borrow a few more trillion into existence to cover endangered deposits across the industry - but as one commentator said of the COVID stimulus "Hey, we're a rich country. We can afford it." /s

51 posted on 03/12/2023 11:48:04 AM PDT by Mr. Jeeves ([CTRL]-[GALT]-[DELETE])
[ Post Reply | Private Reply | To 6 | View Replies ]


To: Mr. Jeeves

I suggest you read on. In my experience there are many ways multi-million and multi-National corporations have of mitigating their risks without having to rely on the FDIC coverage. Rule number one: diversify (and that includes your banking relationship).

The fact that this apparently fundamental rule is forgotten shows how much we as a society have come to expect Uncle Sam to bail us out.


56 posted on 03/12/2023 12:00:27 PM PDT by beancounter13 (A Republic, if you can keep it.)
[ Post Reply | Private Reply | To 51 | View Replies ]

Free Republic
Browse · Search
News/Activism
Topics · Post Article


FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson