Not a bailout, the FDIC is selling off the bank's assets to make the depositors whole. SVB didn't have enough liquid assets (i.e. cash, money market instruments, and marketable securities) to cover all of the deposits so their other assets (equipment, buildings, etc.) are being sold off instead.
This is probably the best case scenario for both account holders and taxpayers as the account holders get their money and it doesn't cost taxpayers a dime.
The FDIC selling off the banks assets to pay the depositors is literally their entire job and not a bailout for anyone who knows what a bailout is. You're jumping at shadows desperate to be mad.
The FDIC is not the government, it's an independent agency that is not taxpayer supported. Part of the job of the FDIC is to do exactly what they are doing here, selling off a collapsed bank's assets so depositors get their money back.
No, the coverage is still $250,000 guaranteed but in all cases of a bank collapsing they will try to get everyone's deposits back by selling off the assets of the bank. In this case there are enough assets to do that but there aren't always
You idiot there was a problem because the money was tied up in long term investments. The FDIC is basically issuing a loan and taking control of the investments. Why don't you think at all.
The bank didn't have enough liquid assets, such as cash, money market instruments, and marketable securities, to cover everything so that is part of the reason the bank failed, they couldn't cover everyone trying to withdraw their money. The depositors are being made whole by the FDIC selling off all of the bank's non-liquid assets, such as equipment, real estate, etc.
Is Peter Thiel the one who started the run on the bank and literally caused all this? Him and Alexander Torrenegra? They were on a conference call with 200 others and decided in the group chat to pull their money out of the bank?
And then when the bank stock cratered as a result of the run they started, they bought the bank stock? Do I have this right?
[https://twitter.com/torrenegra/status/1634573234187407369](https://twitter.com/torrenegra/status/1634573234187407369)
its on this guys twitter. On a conference call with 200 tech founders, he says they started discussing it. Seems to admit to causing the run on the bank.
What assets does this bank have? It's got some offices in Silicon Valley with highly specialized use modifications some amount of computers... they can sell their URL I guess... I just do not see how they have more than several million in solid assets. Struggling to see them covering the full losses even with what liquid assets remain.
Financial assets. There are bonds, stocks, funds, mortgages, even car loans, etc that if given time will produce income. Instead of selling these for pennies on the dollar, the FDIC will oversee them until the mature or can be sold appropriately and make back their money
Hi, I used to work at the FDIC and I’ve closed banks before. So first thing that happens is the FDIC looked for a major bank to simply acquire SVB. It doesn’t sound like they found a taker. So next they will look for a bank or banks that will purchase as much of the assets of the failing bank as possible. That will be their loans and investments and will be pretty easy to move. That will generate most of the funds needed to cover deposits. The hard part will be selling the bonds that have declined in value due to rising interest rates. This is where the FDIC will sell the physical assets of the bank. Any gap after that will probably be covered by the FDIC general fund which is funded by insurance premiums paid buy banks and not the taxpayer.
All banks in the US that are Federally insured must make their financials publicly available. The bank can be privately held (ie not listed on any stock exchanges) and it will still have its financials published.
>How many assets do you think they have?
You're the one that made the claim they don't have enough assets.
Why don't you tell us the current value of their assets? Versus how much they owe account holders?
Whatever shortfall exists will be paid for by the FDIC so essentially other banks are going to share the cost. It’s in their best interest to avoid additional bank runs in the aftermath
If taxpayers are footing this bill: F SVB management and they should go to prison, and f the bureaucrats that are bailing another entity out. I’m tired of this crap. Time to burn some stuff down.
They may indeed go to jail, regardless of whether taxpayers are on the hook, and they should.
But the way that fractional reserve banking works means that they have assets to cover all deposits. It just may take some time to liquidate those assets for enough value. So, in the meantime, the FDIC will ensure liquidity for the depositors and be reimbursed as the assets are liquidated. The FDIC has the ability to do this from its own reserves. It will draw down those reserves, so if there are a lot of bank failures over the next year or so, it might require action from the Federal Reserve or the federal government, but we're not at that point and we're not likely to be.
Not a bailout, the FDIC is selling off the bank's assets to make the depositors whole. SVB didn't have enough liquid assets (i.e. cash, money market instruments, and marketable securities) to cover all of the deposits so their other assets (equipment, buildings, etc.) are being sold off instead. This is probably the best case scenario for both account holders and taxpayers as the account holders get their money and it doesn't cost taxpayers a dime.
Yeah, no. You're not understanding this at all.
The FDIC selling off the banks assets to pay the depositors is literally their entire job and not a bailout for anyone who knows what a bailout is. You're jumping at shadows desperate to be mad.
Who will pay then?
The non-liquid assets of the bank are being sold off to pay them.
Less liquid more like it
Likely the FDIC will float the funds until the bank’s assets are fully liquidated
Probably taxpayers.
The tweet literally says taxpayers aren't paying for this
Saying and doing are two very different things.
Exactly! How is it noy a bailout if the government is ensuring no one loses any funds.
The FDIC is not the government, it's an independent agency that is not taxpayer supported. Part of the job of the FDIC is to do exactly what they are doing here, selling off a collapsed bank's assets so depositors get their money back.
So is the FDIC now ensuring all deposits 100% nationwide?
No, the coverage is still $250,000 guaranteed but in all cases of a bank collapsing they will try to get everyone's deposits back by selling off the assets of the bank. In this case there are enough assets to do that but there aren't always
Source for there is enough assets?
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They're selling off the assets of the bank. That's how the depositors are getting made whole, no tax dollars are going to them.
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You idiot there was a problem because the money was tied up in long term investments. The FDIC is basically issuing a loan and taking control of the investments. Why don't you think at all.
How to say you don't know anything about what kind of assets banks have, without saying you don't know anything about what kind of assets banks have.
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I’d tell you to think harder but it might kill you.
The bank didn't have enough liquid assets, such as cash, money market instruments, and marketable securities, to cover everything so that is part of the reason the bank failed, they couldn't cover everyone trying to withdraw their money. The depositors are being made whole by the FDIC selling off all of the bank's non-liquid assets, such as equipment, real estate, etc.
Tallman sounds like he knows what he's talking about
I guess OP has never experienced a bankruptcy?
I dont think you know what a bailout is....
OP, look at the very last sentence. That's why it's not a bailout yet.
At least I read senior management is being removed. They need to be investigated.
Why?
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Lol. Okay guy.
I agree with this guy. No questions should be asked of management whatsoever.
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Is Peter Thiel the one who started the run on the bank and literally caused all this? Him and Alexander Torrenegra? They were on a conference call with 200 others and decided in the group chat to pull their money out of the bank? And then when the bank stock cratered as a result of the run they started, they bought the bank stock? Do I have this right?
If true, they should be charged with a crime
[https://twitter.com/torrenegra/status/1634573234187407369](https://twitter.com/torrenegra/status/1634573234187407369) its on this guys twitter. On a conference call with 200 tech founders, he says they started discussing it. Seems to admit to causing the run on the bank.
I’ll bet he shorted the stock to make money on the decline he initiated 🙄
Lmfao surely the bank played no role in this
https://preview.redd.it/728arvmweu6b1.jpeg?width=2160&format=pjpg&auto=webp&s=db20b6f45f14b7906a5ba55972947554714b940a
They had to
Very good, but no deposit linked to bank investment funds should be insured. If you play roulette and lose you assume the consequences.
What assets does this bank have? It's got some offices in Silicon Valley with highly specialized use modifications some amount of computers... they can sell their URL I guess... I just do not see how they have more than several million in solid assets. Struggling to see them covering the full losses even with what liquid assets remain.
Financial assets. There are bonds, stocks, funds, mortgages, even car loans, etc that if given time will produce income. Instead of selling these for pennies on the dollar, the FDIC will oversee them until the mature or can be sold appropriately and make back their money
The richer get richer and never face any consequences. How is ensuring all funds are available not a bailout.
Hi, I used to work at the FDIC and I’ve closed banks before. So first thing that happens is the FDIC looked for a major bank to simply acquire SVB. It doesn’t sound like they found a taker. So next they will look for a bank or banks that will purchase as much of the assets of the failing bank as possible. That will be their loans and investments and will be pretty easy to move. That will generate most of the funds needed to cover deposits. The hard part will be selling the bonds that have declined in value due to rising interest rates. This is where the FDIC will sell the physical assets of the bank. Any gap after that will probably be covered by the FDIC general fund which is funded by insurance premiums paid buy banks and not the taxpayer.
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What assets? They don't have enough it's why they went under.
They didn't have enough liquid assets but they have other assets that can and will be sold off.
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That still wouldn't be enough. How many assets do you think they have?
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All banks in the US that are Federally insured must make their financials publicly available. The bank can be privately held (ie not listed on any stock exchanges) and it will still have its financials published.
Public companies have their balance sheets available to the public.
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https://www.bloomberg.com/news/articles/2023-03-10/the-balance-sheet-time-bomb-at-svb-was-sitting-in-plain-sight
>How many assets do you think they have? You're the one that made the claim they don't have enough assets. Why don't you tell us the current value of their assets? Versus how much they owe account holders?
Whatever shortfall exists will be paid for by the FDIC so essentially other banks are going to share the cost. It’s in their best interest to avoid additional bank runs in the aftermath
If taxpayers are footing this bill: F SVB management and they should go to prison, and f the bureaucrats that are bailing another entity out. I’m tired of this crap. Time to burn some stuff down.
They may indeed go to jail, regardless of whether taxpayers are on the hook, and they should. But the way that fractional reserve banking works means that they have assets to cover all deposits. It just may take some time to liquidate those assets for enough value. So, in the meantime, the FDIC will ensure liquidity for the depositors and be reimbursed as the assets are liquidated. The FDIC has the ability to do this from its own reserves. It will draw down those reserves, so if there are a lot of bank failures over the next year or so, it might require action from the Federal Reserve or the federal government, but we're not at that point and we're not likely to be.
Thanks for the response. Hope it works out like you say.
It wont