Banks Failing: Is It 2008 Again?

[Abey]

I totally disagree. Non-interest-bearing [business] accounts should have unlimited protection. It's essential for trust in the system for a proper functioning economy. It's ridiculous to burden businesses with the duty of probing and investigating the banks.

That could be solved by by insurance underwriting, who would hopefully better understand the risk as they are incentivized to lose. I could see a semi federal/private program for businesses insurance, similar to terrorism that exists in the form of TRIA if we force that on business accounts it wouldn’t be a bad idea going forward

[aygart]

That could be solved by by insurance underwriting, who would hopefully better understand the risk as they are incentivized to lose. I could see a semi federal/private program for businesses insurance, similar to terrorism that exists in the form of TRIA if we force that on business accounts it wouldn’t be a bad idea going forward

Such insurance is commercially available.

[Abey]

Such insurance is commercially available.

But not widely used. Maybe if FDIC removes insurance for a business account, it will become commonplace.

[ExGingi]

That could be solved by by insurance underwriting, who would hopefully better understand the risk as they are incentivized to lose. I could see a semi federal/private program for businesses insurance, similar to terrorism that exists in the form of TRIA if we force that on business accounts it wouldn’t be a bad idea going forward

FDIC = Federal Deposit Insurance Corporation

[zh cohen]

I totally disagree. Non-interest-bearing [business] accounts should have unlimited protection. It's essential for trust in the system for a proper functioning economy.

A system that requires external guarantees is already broken.

I agree that money which is not earning interest should be guaranteed, but it should be the bank which provides that guarantee (either by not risking the money, or by being insured).

It's ridiculous to burden businesses with the duty of probing and investigating the banks.

Right, which is why banks will have to make it very easy and clear (if they want anyone to use them).

[Abey]

FDIC = Federal Deposit Insurance Corporation

It’s built around protecting individuals hence 250 k limit and the incentives for businesses are aligned differently and perhaps shouldn’t be borne by the individual.

[zh cohen]

FDIC = Federal Deposit Insurance Corporation

Do you sell any policies where I pay for $250,000 of coverage and get unlimited?

[WayBackMachine]

Do you sell any policies where I pay for $250,000 of coverage and get unlimited?

how about pay zero and get 250k, check out all their products some may be more attractive than others

[liosac]

You can always do an Insured Cash Sweep or CDARS and get practically unlimited FDIC insurance for free right now.

[liosac]

https://thelakewoodscoop.com/news/video-update-on-bank-situation-and-what-to-look-out-for-next-ira-zlotowitz-founder-of-gparency/

Good point about 1031s.

[dealmaster]

As per multiple news reports the big 4 will give $5 B each in deposits to First Republic Bank, GS and MS will give 2.5 B each, while PNC, Truist, State Street, US Bancorp and BNY Mellon will give $1B each. Note these are deposits to cover liquidation requests for FRB. Wondering what your thoughts on this are? The only way I understand the banks being so “nice” is to get regulators off their backs by perverting a bigger collapse of the banking system, which would have necessitated a bigger and more public response.

[AsherO]

As per multiple news reports the big 4 will give $5 B each in deposits to First Republic Bank, GS and MS will give 2.5 B each, while PNC, Truist, State Street, US Bancorp and BNY Mellon will give $1B each. Note these are deposits to cover liquidation requests for FRB. Wondering what your thoughts on this are? The only way I understand the banks being so “nice” is to get regulators off their backs by perverting a bigger collapse of the banking system, which would have necessitated a bigger and more public response.

FRB is suddenly short $19B? And these banks are giving this money or lending it?

[ExGingi]

FRB is suddenly short $19B? And these banks are giving this money or lending it?

The banks are depositing money at FRB (so in a way, they are lending) with two banks actually withdrawing funds. This is all in an attempt to avoid/mitigate a bank run.

[yuneeq]

The banks are depositing money at FRB (so in a way, they are lending) with two banks actually withdrawing funds. This is all in an attempt to avoid/mitigate a bank run.

Is this a free market move or is there a federal agency pressuring them to do so?

[CountValentine]

Is this a free market move or is there a federal agency pressuring them to do so?

[CountValentine]

Why are they not doing this for SVB? 

[aygart]

Is this a free market move or is there a federal agency pressuring them to do so?

Or do they want to avoid more industry scrutiny

[ExGingi]

Is this a free market move or is there a federal agency pressuring them to do so?

https://twitter.com/elerianm/status/1636470190480187393

[yuneeq]

Or do they want to avoid more industry scrutiny

Whatever the true reason is - now that the cats out of the bag, perhaps the feds should make it clear that they expect banks to step up like this in the future.

[Euclid]

Whatever the true reason is - now that the cats out of the bag, perhaps the feds should make it clear that they expect banks to step up like this in the future.

This feels kinda like teams helping each other in a sports league