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Biden's banking policy
#1

Biden's banking policy
I can't find any recaps of the speech yet, but Biden just announced that the government, as of right now, will guarantee all deposits of any size. This after a second bank collapsed over the weekend.

The bailout (only for depositors, not banks, and managers will be fired) is paid by fees banks have been paying, not by the people.
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#2

Biden's banking policy
(03-13-2023, 01:29 PM)Dom Wrote: I can't find any recaps of the speech yet, but Biden just announced that the government, as of right now, will guarantee all deposits of any size. This after a second bank collapsed over the weekend.

The bailout (only for depositors, not banks, and managers will be fired) is paid by fees banks have been paying, not by the people.

https://www.youtube.com/live/aWaIpB-TePI?feature=share
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#3

Biden's banking policy
WASHINGTON – President Joe Biden attempted to calm market and taxpayer jitters on Monday morning, saying that Americans can have "confidence" in the banking system after the collapse of Silicon Valley Bank.

"Americans can have confidence that the banking system is safe," Biden said at the White House. "Your deposits will be there when you need them."

Biden said "no losses" would be borne by taxpayers, and the money would come from the fees that banks pay into the Deposit Insurance Fund.

Federal regulators also assessed over the weekend that Signature Bank of New York presents a systemic risk and said they were taking it over. Biden said Monday that managers of the banks would be fired, and investors would not be protected.

Stocks were mixed as the markets reacted to federal regulators' plan and Biden's speech.

Silicon Valley Bank's failure is the second largest since the 2008 financial crisis and came after struggling tech companies made a run on the bank, withdrawing cash at a rapid pace and forcing the bank into a position where it had to sell bonds at a loss to cover the withdrawals.

Banking crisis: President Joe Biden says taxpayer funds won't be used to bail out SVB, Signature bank (yahoo.com)
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#4

Biden's banking policy
Quote:investors would not be protected.


Ahhh....expect the republiKKKunts to have a shitfit then. They LOVE "investors."
Robert G. Ingersoll : “No man with a sense of humor ever founded a religion.”
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#5

Biden's banking policy
Quote:investors would not be protected
I think that is pretty much how it has been since the 1930's (with the creation of the FDIC).
It is too bad the other parts of government don't work as well as the FDIC.
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#6

Biden's banking policy
As for the taxpayers, anyone with money in those banks is a taxpayer, and do I even have to ask where the money the banks paid for the insurance came from?
If you get to thinking you’re a person of some influence, try ordering somebody else’s dog around.
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#7

Biden's banking policy
Not only that, but under normal circumstances, those fees would go to cover other costs. There's no such thing as a free lunch.
Mountain-high though the difficulties appear, terrible and gloomy though all things seem, they are but Mâyâ.
Fear not — it is banished. Crush it, and it vanishes. Stamp upon it, and it dies.


Vivekananda
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#8

Biden's banking policy
(03-13-2023, 04:54 PM)Fireball Wrote: As for the taxpayers, anyone with money in those banks is a taxpayer, and do I even have to ask where the money the banks paid for the insurance came from?

Of course, the people ultimately always pay for absolutely everything. Whether that's directly, through taxes or via higher prices, they always pay. It's a given.
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#9

Biden's banking policy
As bad as any bank failures are, this bank closing because it is basically just barely insolvent and the law forbids them from hiding this fact. This maximizes the amount that can be returned to customers (who often get 95%+ back) beyond any FDIC insurance (and the FDIC fund gets refilled from that as well). Where unregulated entities often collapse when they are more than 50% insolvent and just can't hide it anymore with people getting back pennies on the dollar. As was already pointed out, ultimately the bank customers already paid for this by depositing money with low/no interest with the bank (who then paid the premiums).

I guess I just want to stress that this is how the system is supposed to work, and it seems like it might actually be working. I hope it remains that way.
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#10

Biden's banking policy
(03-13-2023, 04:52 PM)rocinantexyz Wrote:
Quote:investors would not be protected
I think that is pretty much how it has been since the 1930's (with the creation of the FDIC).
It is too bad the other parts of government don't work as well as the FDIC.
FDIC insurance is normally limited to $250K. According to one of the banks I deal with, it is per account, not all accounts at one bank -- or at least per savings account. I don't trust that however and would never have more than $250K with one institution.

FDIC insurance is not sufficiently funded that even that level of protection would survive a general bank run, and large banks have lobbied against paying more into the fund.

What the fed is doing is covering all deposits regardless of size at a bank used by rich fucks. It may be that one or two such bailouts could happen out of the fund, but certainly not an unlimited number of them.

At some point the government would have to print money to cover it, at the very least, and at least technically abandon their claim that taxpayers won't have to foot the bill.

The irony is that the fed unanimously approved a merger between SVB and another bank a scant 20 months ago, stating that they were solid and that the merger posed no significant risk to the system.

It's all smoke and mirrors. There's a reason the system is referred to as "fractional banking".
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#11

Biden's banking policy
The US banking system is solvent. I have no doubts about my banking accounts.

However, investors are another matter. When you invest in anything "for profit", you assume a risk of loss as well as gain. If everything was protected gain, we would all be billionaires. Depositors are and should be protected. We are, after all, just accepting a promise that our deposits are safely stored "somewhere". And also that our deposits return to us in the form of mortgage loans for other peoples' houses, etc. Think of 'Its A Wonderful Life'. My deposits help fund your house mortgage or small business. And on average, it works.

Unless bankers go after bad/risky investments using our deposits to get more money. I would never be so stupid as to put my deposits in a bank with a finite and risky scheme of one investment strategy. I stick to regional and local banks myself.

So if one deposits in a bank with a singular strategy of investment, you are taking a risk. And the returns better be good in return, And can fail.

Those who took a high risk (by bank investment strategy) have only themselves to blame. If you enjoy the benefits, you are also risking the loss. We need to protect innocent customers, but the risk-takers managers should get the loss.
Never try to catch a dropped kitchen knife!
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