SVB FDIC Deposits

> The FDIC insures up to $250k only.No, they directly insure $250k and repeatedly and consistently demonstrate their ability to recover everything else by repossessing failing banks and selling them to other parties. They don't promise it's all immediately available past $250k, so it may take some time, but for you to expect a haircut you would need an example of someone getting one.I would prefer this be more explicit policy though.> That's an irrational thing to d

I dont see why this was downvoted looking at some historical examples:* IndyMac Bank: In 2008, IndyMac Bank, a large savings and loan association, failed and was taken over by the FDIC. At the time of its failure, IndyMac had $1 billion in uninsured deposits. The FDIC estimated that it would be able to recover only 50 to 80 cents on the dollar from the bank's assets. As a result, the FDIC paid advance on uninsured funds of 50% of the uninsured amount, or $500 million, to the bank's

It’s not FUD. If the government sends the message that depositors will go down with the ship every bank that isn’t considered too big to fail will see all their uninsured deposits start moving out. Many of them won’t be able to meet their liquidity needs as a result and go into receivership. With every bank that goes into receivership the outflows will only accelerate. People will start to get worried about insured deposits as we hit the limits of what FDIC can cover and insured deposits will st

The money is insured by the FDIC against bank failure. The actual banks holding the money didn't fail. The money is still there. The problem is its in a big unlabeled pile so they don't know whose money is whose and how much each person has.Note that fail here has a very specific meaning - as in the banks doesn't have the funds to give you your deposit back. Not fail as is "something went horribly wrong".

> Why isn't the assumption basically that all banks are insolvent right now?Because the FDIC decided to make all depositors immediately whole. Looking at their FAQ [0], depositors can even continue using their money directly from their existing accounts as they have been before the collapse. This is a pivot from their original position of providing more limited support [1]. The same is being done for Signature bank [2]This is a strong signal, that they will do the same if other ban

The bank is gone, it’s not being bailed out it no longer exists. It has in entirely been taken by the fdic and will be parted up and sold for the benefit of those the former bank owed money to (to wit, those who deposited money with it)

It's not that people are calling it an exit scam, rather they're talking about uninsured deposits as if they're completely gone. I feel that worry descends straight from cryptocurrency exchanges blowing up, where there is generally no assets left. (I agree I overspoke by calling FTX an "exit scam", when it seems more like gambler's ruin)AFAIK the FDIC doesn't look kindly on people who liquidate their accounts during a bank run [0]. This has two purposes. Fir

The FDIC insurance comes into play after all other options have been exhausted. Given the FDIC can draw on the treasury and SVB has assets significantly in excess of deposits there’s literally no chance anyone will lose anything other than the management of SVB.

Actually as far as I know nobody has lost any money out of their bank accounts. I'm under the impression (someone can correct me if I'm wrong) that banks which have failed have had all their assets and liabilities transferred to another bank -- the FDIC limit hasn't come into play because the FDIC hasn't actually paid out any money.

Whats going on? HN told me that if depositors were bailed out then nothing bad would happen.