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[icymist]

This message was self-deleted by its author (icymist) on Sun Mar 12, 2023, 05:33 PM. When the original post in a discussion thread is self-deleted, the entire discussion thread is automatically locked so new replies cannot be posted.

[rampartc]

1. the best way to rob a bank us to own one.

i wonder who decided to pay big bonuses at svb the day they were shut down.

[kelly1mm]

2. "No losses will be borne by the taxpayer" How do they know this and who, if not the

taxpayer will be bearing the (admittedly small) losses to depositors? It is my understanding that SVBs assets, if held to maturity (which is the cause of this failure - having to cash in assets at a discount early to satisfy depositors excessive withdrawals) would cover or almost totally cover all deposits. Is the fed going to make the depositors wait till maturity to get their money? If not they will be selling at a discount and then there will not be enough funds to cover the deposits. Who is picking up that difference?

[FBaggins]

5. The other banks will bear the losses (if any)

That is… losses to depositors.

Shareholders will likely lose everything

[kelly1mm]

7. What other banks? As far as I know no other bank is buying SVB. Now they may

want some of SVBs assets, at a discount of course, but the whole reason the FDIC, Fed and Treasury are starting this program is that no bank stepped up.

Shareholders of SVB will be wiped out yes - we both agree on that.

[FBaggins]

12. All of them

FDIC coverage is already funded by premiums from the banks. They’re just saying that if excess payouts are necessary (not a certainty at this point), an extra assessment would be applied to all of them (something that is explicitly contemplated in the FDIC charter)

[LuckyCharms]

3. This looks like smoke to me.

Where's the money coming from if not the taxpayers?

What caused the run?

Are Yellen and Powell stating that the assets are there to cover all deposits, and if so, what caused the problem?

And why is this happening to Signature Bank at the same time?

[FBaggins]

9. Liquidity and asset/liability balance aren't the same thing

See the bank run scene in “It’s a Wonderful Life”.

Word is that their assets are sufficient… but the rate environment is such that they take big losses if they have to sell.

The banks taking the hit right now appear to all be banks that attract large dollar depositors but they over-invested in treasuries rather than consumer and commercial loans.

[kelly1mm]

10. Technically they have (had) assets to cover deposits but they were in long term treasuries

bought when interest rates were lower than now. What happened is depositors started excessive withdrawals which meant SVB had to sell some of its long term holdings at a significant discount. a long term treasury with a low interest rate is not as valuable as its face value as new long term rates are higher so the buy price will be discounted to make the real interest rate match current rates.

It basically was a cash flow crunch necessitating a fire sale of assets.

[angrychair]

4. This statement is BS

and absolutely not telling the whole story or truth.

How are all deposits covered?!? By whom and at what cost?

What will happen to the executives that caused this problem? They get their golden parachutes and the little guy suffers yet again.

[doc03]

6. Here we go again a bank fails after they

lobby to reduce regulations and just like in 2008 we get stuck with the bill. The old too big to fail bs all over again.

[sanatanadharma]

8. Crypto currency should not be made whole in US dollars

Crypto currency deposits should not be made whole in US dollars. That sounds like money laundering.

[icymist]

13. Closing this thread down as there is an earlier one I didn't see on this subject.

Please continue discussion here: https://democraticunderground.com/100217721544

RE: Joint Statement by the Department of the Treasury, Federal Reserve, and FDIC