Trump-era deregulation deemed a key culprit in failure of SVB
- Thread starter gwb-trading
- Start date
"The Federal Deposit Insurance Corporation (FDIC) is an independent agency of the United States government that provides deposit insurance to protect depositors in case of bank failures. The FDIC is funded through premiums paid by insured banks and thrift institutions, and it also has a reserve fund known as the Deposit Insurance Fund (DIF).
"As of December 31, 2021, the FDIC reported that the DIF had a balance of $129.8 billion. This represents an increase from the previous year's balance of $112.0 billion. The DIF is maintained at a level that the FDIC believes is sufficient to cover expected losses from insured deposits in the event of bank failures. The FDIC is required by law to maintain the DIF at a reserve ratio of at least 1.35% of insured deposits, and as of the end of 2021, the reserve ratio was 1.38%."
That is horrifying. After these two bank failures, what will remain of the fund? Lord only knows at this point.
The parasite class may have to get jobs.
What does that have to do with anything? And what is your definition of Parasite class?
If the DIF doesn't have enough money to bailout shareholders, shareholders (the parasite class) may have to get jobs.
It's not bailing out shareholders, it is making whole depositors. The people who have actual cash in the bank. Haven't you been following the news of this? My question was what happens if a few more banks fail and the FDIC runs out of money to pay back the depositors?
The government does not run out of money... also SVP didnt FAIL.... it is having some issues and people made a run to get their money out and the feds stopped in to backstop the bank and give back some confidence so people would not pull their money out at once.
Banks never have enough money sitting in a bank if a large amount of depositers suddenly show up to claim back their money. The money is lent out otherwise it is dead money leaking income out of the bank. Minimum reserves are required to meet certain demand requirements plus some reserves but not if llike 60% of the depositers show up in one day and all want to withdraw their money.
So the FDIC protects them but the bank has money...it is just tied up in assets which are other people's liabilities. By stepping, depositors decide they can breath easily and leave their money in the bank and that prevents the bank failure.
Yes, I know that. But what I read was that if enough money is there for the depositors then shareholders are next. Combined with assets sales.