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[deleted] t1_jcgls36 wrote

[removed]

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PM_ME_UR_DIET_TIPS t1_jcgnb7h wrote

>Lankford said the impact of this standard would be that small banks would be less appealing to depositors with more than $250,000, the current FDIC insurance threshold.

Isn't that the correct approach?

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Draker-X t1_jcmh6ls wrote

If we want to kill the business side of non-big banks, sure. This is basically telling every business other than the truly smallest that they're better off with one of "the Big 4" rather than even a good-sized, multi-state regional bank.

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noxx1234567 t1_jch0mc5 wrote

That seems incredibly corrupt and unethical to bail out some bank depositors selectively , why are SVB depositors getting bailed out when others won't ?

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Warmstar219 t1_jcirl85 wrote

Because "too big to fail" is now a viable business strategy employed by those at the top.

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Immortal-one t1_jciquqs wrote

If this is anything like 08, the failing banks I buy stock in for hopes of a bailout and rebound will be the ones that don’t get bailed out and drop to zero

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Office_glen t1_jckxp3v wrote

> why are SVB depositors getting bailed out when others won't ?

because the depositors at other small banks don't lobby government

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Jeremycycles t1_jcgvv5y wrote

The FDIC may say they will guarantee everything over 250,000 but they literally just used all of their cash reserve to do it for a bank that isn't even in the top 15 largest in the US.

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TheRealCabbageJack t1_jcgyhou wrote

Counterpoint: it’s depositors were all very very rich people. That is all.

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hardolaf t1_jcizm5h wrote

Counterpoint, it's depositors were mostly relatively low net worth startups that employ hundreds of thousands of people who pay a lot in taxes.

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InteractionNOVA2021 t1_jch8md9 wrote

The FDIC will require the other banks it insures to pay a special assessment to help pay for at least some of this depositor rescue. The same thing happened after the Banking Crisis of 2008. At that time, the premium was 20 cents for every $100 dollars of domestic deposits.

I also anticipate that the FDIC will recover a decent amount from the sale of SVB's assets. This isn't the typical situation in which the bank is burdened by a substantial portfolio of non-performing loans.

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Jeremycycles t1_jch9i93 wrote

After the assets are sold. So right now if any regular Joe Schmo bank fails the regular people are fucked

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InteractionNOVA2021 t1_jchciwq wrote

The Deposit Insurance Fund is backed by the U.S. Treasury. The FDIC was bailed out in the 1980's and again after the 2008 Banking Crisis. So, insured depositors are still protected.

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Jeremycycles t1_jchdcee wrote

False, the FDIC is not backed by the treasury but they do invest in treasury securities. The FDIC is completely funded by member banks.

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Warmstar219 t1_jcirqwh wrote

And that, in turn, will be passed onto the people depositing at the bank.

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PhoenixReborn t1_jch3537 wrote

They were pretty explicit that SVB and Signature were getting an exception due to systemic risk. The Fed and FDIC would have to reach the same conclusion for another intervention. How many deposits in Oklahoma are even uninsured?

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TheBirdBytheWindow t1_jchcgbb wrote

>How many deposits in Oklahoma are even uninsured?

Think about how much land, cattle and feed is out there and where all those ranchers bank. Then imagine what all is at stake if that goes to pot.

Its not great.

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HildemarTendler t1_jcj3hjl wrote

Ranchers don't typically have a ton of cash in banks. Most of their assets are in the ranch itself. And then investments if they have a lot of excess capital.

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TheBirdBytheWindow t1_jcjgvnx wrote

>Ranchers don't typically have a ton of cash in banks.

Maybe not, but they have accounts of some magnitude to process their banking and then the mortgage on the property if not owned outright. There's significant investment there and it can't all be owned outright.

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