No bailouts for #SiliconValleyBank or its depositors. Insurance has always been there, and those companies that didn't buy it are the ones responsible for taking that risk. https://www.theguardian.com/business/2023/mar/12/silicon-valley-bank-collapse-no-bailout-janet-yellen
@eighthave This is the first I've heard that depositors can buy insurance themselves. Can you please provide pointers to such providers? Is there an extra rider I can purchase from FDIC? #svb
@lcannell @eighthave Best option for that is sweep accounts. Which either put excess amounts into various other FDIC banks but treat them as one or send the excess to Money Market Funds. There is no one that I’ve seen offering straight deposit insurance - the products instead seek to cover the excess by money movement of some kind.
Bailing out #SVB depositors means that the insurance premiums go up for all depositors. FDIC money comes from banks paying insurance premiums. #SVB is getting special treatment. I think we're back to #TooBigToFail, this time the #SiliconValley is taking the lead, not #WallStreet.
Plus #SVB was actually fighting against expanded deposit insurance, so why should the banking system bail out depositors in such a bank? https://www.levernews.com/svbs-lobby-groups-fought-proposal-to-bolster-deposit-insurance/
@lcannell @Siberian the #US could instead bail out the depositor companies by taking an ownership stake, in which case they would not fail, and then it would not come out of the FDIC bank fees. I suppose this is better than 2008, since the bank owners are not being bailed out. But I still think back room deals to bail out private companies is corrupt. If FDIC insurance for all deposits is a good thing, then change the laws and regulations to make it so.
@eighthave @Siberian Yes, I agree. We are back to too big to fail, which is why it was deemed a "systemic risk exception"