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Hans-Christoph Steiner

If the "U.S. banking system remains resilient and on a solid foundation", as #US Treasury says, then why do they need to take a special action to bail out #SVB depositors who should have gotten insurance for themselves? To me, this looks like yet another #bailout for the wealthy and well connected.

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Larry Cannell

@eighthave This is the first I've heard that depositors can buy insurance themselves beyond what they get from FDIC. Can you please provide pointers to such providers? Is there an extra rider I can purchase from FDIC?

Kevin Kolk

@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 that allows full FDIC coverage.

Mar 13, 2023, 12:21 PM·Public·Ivory for iOS
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Hans-Christoph Steiner

@Siberian @lcannell

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? levernews.com/svbs-lobby-group

The LeverSVB’s Lobby Groups Fought Proposal To Bolster Deposit InsuranceMonths before Silicon Valley Bank collapsed, its D.C. advocacy groups said the FDIC initiative “would unduly burden banks.”
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Larry Cannell

@eighthave @Siberian Yes, I agree. We are back to too big to fail, which is why it was deemed a "systemic risk exception"

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Hans-Christoph Steiner

@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.

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