Quote:
Originally Posted by Slava
Well there it is. Janet Yellen said they've arranged a new funding entity the "Bank Term Funding Program" and it will make sure that depositors will be made whole. They also closed another bank (Signature Bank in NY) and those depositors will also be made whole.
Basically, crisis averted...or at least crisis kicked down the road.
|
I think those are sort of two separate things. For Silicon Valley Bank (and Signature Bank), it sounds like the FDIC basically figures that there are enough assets to pay out to depositors, and it's just shareholders and unsecured debthholders left holding the bag.
And then the Federal Reserve has now set up a lending program where financial institutions can get loans against their T-bills and MBSs to pay out withdrawals to ensure liquidity.
Quote:
Originally Posted by Bill Bumface
This is why free enterprise can’t go unchecked. It doesn’t work. People having faith in a system is a massive component in keeping lots of said systems functioning.
While it’s undoubtedly brutal that a bunch of public money will go to saving the day, I think the government and regulators need to instil short term faith in the banking system, and then follow that with regulatory changes to instil long term faith and actual greater fundamental security in banking across the board.
|
It doesn't sound like taxpayer money is funding it. The statement specifically says that no losses as a result of this will be borne by taxpayers, so presumably there are enough assets to cover depositors. Or perhaps the FDIC (which isn't funded by taxpayers) will be covering more than it normally would to make everyone whole.