Creating a banking system where all uninsured deposits become insured through government fiat also poses systemic risks.
Many people smarter than me were worried about a bank run. That's certainly a risk worth preventing. But I don't know why preventing that risk required an SVB bailout.
Yes, some SVB depositors did nothing wrong. (Full disclosure, some businesses I invested in had deposits in SVB, so this is a statement against interest.) But many banked with SVB because of cheap venture debt, or other services subsidized by SVB's risky business model.
The idea this won't be borne by taxpayers is also a joke. The inflated fees at every regional bank will be paid by taxpaying small banks and their taxpaying consumers. Those inflated fees are not incidental: they're what's paying for the expanded FDIC insurance.
Finally, how is everyone letting the regulators off the hook? Maybe if the regulators focused on systemic risk instead of diversity, climate, and gender identity, this would have never happened. Just check out this document. There are many more like it.
federalreserve.gov/newsevents/pre…
federalreserve.gov/newsevents/pre…
• • •
Missing some Tweet in this thread? You can try to
force a refresh
