Discussion » Questions » Finance » Anyone surprised the gov is going to cover all deposits from the Silicone Valley Bank failure?

Anyone surprised the gov is going to cover all deposits from the Silicone Valley Bank failure?

Over 90% of depositor had accounts over the $250,000 FDIC limit.  
 
But gov to pay them in full to the tune of $250 Billion. 
Can't have Pelosi, Oprah, the former royals etc losing money. 
 
 

Posted - March 13, 2023

Responses


  • 32359
    No...I am complaining about the special treatment for ALL the depositors at these 2 banks.   
      March 20, 2023 8:46 AM MDT
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  • 2539
    Then what was the purpose of singling out Oprah, Pelosi and the royals?  Biased a bit - noooooo.
      March 20, 2023 11:16 AM MDT
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  • 32359
    Because these high profile clients and green tech firms, are the reason for the waiving of the rules.  
    You can call that biased on my part. I just call it calling a duck, a duck. I do not believe if this were a local agricultural bank in the Midwest that there would be any waiving of the rules. They would simply tell that farmer(s) too bad. Those are the rules and we have no control of the limits of coverage. 
      March 20, 2023 3:30 PM MDT
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  • 2539
    You know, trying to make you see that these banks are being propped up not because of the high profile depositors but because the LITTLE depositors would be even more harmed is an impossible task, so I am done.
      March 21, 2023 11:46 AM MDT
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  • 32359
    NO....the LITTLE depositors are protected. 
     
    They do not need the FDIC to waive the limits.
     
    The waiver is for the Big depositors. 
    This post was edited by my2cents at March 21, 2023 2:15 PM MDT
      March 21, 2023 1:36 PM MDT
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  • 2539
    I wouldn't need them to do that for me because I would NEVER put more than the insured amount into one account - big bank or small.  
      March 21, 2023 11:43 AM MDT
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  • 32359
    Well, if you are smart enough to put your money in separate banks to protect yourself, why shouldn't these other people be expected to be smart enough to do the same? This post was edited by my2cents at March 21, 2023 2:17 PM MDT
      March 21, 2023 1:41 PM MDT
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  • 2539
    Because it would take more banks than are available to open accounts for millions of dollars.
      March 21, 2023 2:23 PM MDT
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  • 32359
    There 27,819 FDIC insured institutions in the US.  

    For a single person with $1M, they would need to use 4 different banks.  Or 2 if they have different types of accounts (ie. checking and CD) just the 1 if they have one of each of these ownership types.  Single accounts, certain retirement accounts and employee benefit plan accounts, joint accounts, trust accounts, business accounts 

    A married couple would only need with a total of $1M could do it with 1 bank.  (1 single checking for wife, 1 single checking for husband, 1 joint checking, and 1 CD) or some other combination of the ownership types. 

    For $1B,  a single person would need 4,000 banks or 2,000 or fewer depending on the type accounts.  
    Again a married couple would need 1,000 depending on the types.

    There are 27,819 listed on the FDIC website.  https://banks.data.fdic.gov/docs/
    (I downloaded the list to excel to see the number)

    And most people with that kind of money, do not have it sitting in the bank.  It is in stocks, precious metals, etc.

    Should be just remove the FDIC limit and ensure it all 100% regardless?  Whatever we do it should be, the same rules for everybody.   
      March 21, 2023 3:01 PM MDT
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  • 2539
    Well, since you brought up that most people with that kind of money don't have it sitting in the bank, then the people they are trying to protect are the smaller depositors who, clearly, outnumber the Oprahs, Pelosis and royals so what's your point?  Wasn't it the small depositors about whom you were concerned?

    Maybe, people should take some personal responsibility and make sure they use an FDIC insured bank. This post was edited by Spunky at March 22, 2023 7:00 AM MDT
      March 22, 2023 6:42 AM MDT
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  • 32359
    Over 90% are over the FDIC limits....those are not small depositors.....
    Small depositors will not be over the FDIC limit. (And are covered without the waiver)
      March 22, 2023 6:47 AM MDT
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  • 2539
    You're all over the place here.  I have no idea what point you are trying to make.  Your last comment was about small depositors not getting a waiver.  Now you're saying 90% are over the limit and don't keep their millions in the bank.  I can't continue this discussion with you because I can't follow your disorganized thought process. This post was edited by Spunky at March 22, 2023 7:05 AM MDT
      March 22, 2023 7:04 AM MDT
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  • 32359
    I have only one point.  
     
    Enforce rules and laws as written for everybody. In this case, the rule is $250k per ownership type per depositor if a bank fails. If we remove the limit for one bank then we remove the limit for all the banks.
     
    We should not have different sets of rules/laws. 
      March 22, 2023 7:59 PM MDT
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  • 2539
    Then all your bluster about Oprah, Pelosi and the royals is motivated by your personal dislike for them and has nothing to do with "rules."
      March 23, 2023 7:31 AM MDT
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  • 32359
    Nope. As I said we should never have
    "rules thee but not for me."
     
     
    Oprah, Pelosi's, royals and tech firms are the reason for the special rules for the 2 banks. (The "not for me" part) 
    This post was edited by my2cents at March 24, 2023 6:44 AM MDT
      March 24, 2023 6:41 AM MDT
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  • 2539
    Oprah, Pelosi and the royals are NOT the reason for the special rules.  You make it sound as though they are the only three depositors in the banks. You don't even realize how ridiculous you sound.  Stop singling them out already.  We know you hate them.  Enough.
      March 24, 2023 9:17 AM MDT
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  • 32359
    I do not hate them....
     
    I do believe they are the reason for special rules. We disagree so what else is new. 
      March 24, 2023 7:10 PM MDT
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  • 2969
    The news I heard is to the contrary. 
      March 13, 2023 2:48 PM MDT
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  • 32359
    The FDIC is not enforcing the $250k insurance limit for SVB or Signature Bank.  
      March 13, 2023 6:15 PM MDT
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  • 13249
    But you are OK with depositors who happen to be Republicans losing their money? Why do you feel the need to bring up politics at all?
      March 14, 2023 12:43 PM MDT
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  • 32359
    I just like to see rules and laws enforced equally and fairly. 
    The rules on this  say each depositor is insured for up to $250k. 
    That is what they should be following. Regardless of the political leanings of the depositors. 
      March 14, 2023 4:02 PM MDT
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  • 9675
    Was it fair for Trump to remove banking regulations but leave the FDIC insurance? Had regulations been left in place, this would not have happened. If the accounts weren't insured,  depositors would have realized the risk. And have you thought about the ramifications to the economy if depositors lose their money? It's fine to be against the bailout, but I get the sense you don't have a very deep understanding of the situation and why there is no simple answer. 
      March 14, 2023 6:26 PM MDT
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  • 32359
     No President has the power to remove the FDIC or remove coverage for any specific banks. Are you suggesting that only large banks depositors should be FDIC insured?
     
     What makes you believe, SVB was not under regulations? They were simply under the regulations for banks with assets from $100B to $249B.  
     
     Giving 100% coverage to all the depositors is a dangerous precident. It gives the banks no reason to be careful with depositors money. And could even be used by enemy countries etc to sabotage the US economy.
     (ie...China deposits large amounts of money into a bank. Then withdraws it all in one day.....same thing as what happened with SVB but with tech accounts)
     
    Yes, it likely would have still happened under the original Dodd Frank rules. This bank assets leaned to long term bonds. Under S.2155, it would have told SVB to purchase more assets. But they would likely continue to by the long term assets to satisfy the requirements. Which would not have helped the situation. 
     
    This post was edited by my2cents at March 21, 2023 2:18 PM MDT
      March 18, 2023 6:25 AM MDT
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  • 13249
    Which means you can’t blame President Biden like you want to.
      March 18, 2023 9:19 PM MDT
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  • 32359
    Did I say Biden admin? No, I said the GOV....the FDiC is part of the GOVERNMENT. I blame Janet Yellen of the Treasury Department, the Federal Deposit Insurance Corporation (FDIC) and the US Federal Reserve as they are the ones who voted to waive the rules.
      March 19, 2023 6:30 AM MDT
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