It's different

[minx]

Or is it?

Aren't these banks supposed to carry insurance of some sort?

[Dave's Not Here Man]

I'd have to go with apples and oranges on that one, since it's not the depositors that bankrupted them. So yeah, the FDIC should have the depositors covered either way. Borrowers not so much.

[minx]

Well, there are already Republicans calling for the bank's investors to be bailed out on the 'too big to fail' principle.

I agree that depositors should be made whole - not their fault that the bank crashed. But everyone else can go screw themselves.

[minx]

wapo.st/3JA1nT4

Looks like a bailout is coming (I used a gift article, so it's not behind a firewall).

I can get the rationale - seems like a lot of large companies keep their assets there, so SVB goes down and stays down, they ain't making payroll this month. What I don't get is that 5 banks control the majority of money in this country. Have we learned absolutely nothing?

And yes, that was a rhetorical question.

[bobathon]

There's a circular aspect here, too. Venture capitalists invest in the SVB bank. They also do venture capitalist investments in startups. They direct that those startups put their money in SVB, so they can make money on both ends. And BTW amplify their risk exposure.

Depositors are protected up to $250K. Investors should suck it, we don't need to socialize their risks.

[minx]

Well, evidentially a lot of depositors weren't all investors, but start-ups that need to pay folks.
I can see making depositors whole. I truly can. And it seems that there's some sort of fund that banks have to pay into for this purpose.

Buuuut. Clearly the $250K limit can be easily overwritten if the Fed wishes. Perhaps it's a little past time to either raise it or eliminate it?

And perhaps, just perhaps, the administration and Congress could place some of those bank regulations that the Republicans removed back in place? (hahahaha, I jest)

[Dave's Not Here Man]

Not sure how that would change anything and might make matters worse given that those type of capitalists will take every inch (penny) the regulators give them. Unless the democrats have a supermajority, which may never happen again, those regulations that the Trumps took off of Wall St are here to stay at least until the next GD.

[minx]

Probably past that as well. After all, Wall Street freaked at Dodd-Frank, which added a thin wall of protection that's since been dismantled.

I've pretty much stopped looking at my 401(k) right now.