From Common Dreams, March 28:
"The bailout really did protect billionaires from taking a modest haircut," one observer wrote in response to the FDIC chief.
In prepared testimony for a Senate Banking Committee hearing slated for Tuesday morning, the chair of the Federal Deposit Insurance Corporation reveals that the 10 largest deposit accounts at Silicon Valley Bank held a combined $13.3 billion, a detail that's likely to intensify criticism of federal regulators' intervention in the firm's recent collapse.
When SVB was spiraling earlier this month, the FDIC, Treasury Department, and Federal Reserve rushed in to backstop the financial system and make all depositors at the California bank whole, including those with accounts over $250,000—the total amount typically covered by FDIC insurance.
"At SVB, the depositors protected by the guarantee of uninsured depositors included not only small and mid-size business customers but also customers with very large account balances," FDIC chief Martin Gruenberg writes in his prepared testimony. "The ten largest deposit accounts at SVB held $13.3 billion, in the aggregate."
Gruenberg goes on to estimate that the FDIC's $125 billion Deposit Insurance Fund (DIF)—which is financed primarily by assessments on insured banks and "backed by the full faith and credit of the United States government"—took a $20 billion hit as a result of the SVB intervention.
According to Gruenberg, nearly 90%—$18 billion—of the DIF loss stemming from SVB is "attributable to the cost of covering uninsured deposits." He added that the DIF absorbed a roughly $1.6 billion cost to cover uninsured deposits at Signature Bank, which failed shortly after SVB....
....MUCH MORE
Did the depositors prudently purchase private deposit insurance for the amount over the $250K FDIC limit? If not, why not?
Shoulda been a bail-in.
Previously from Common Dreams:
- Richard Cloward and Frances Fox Piven: "The Weight of the Poor: A Strategy to End Poverty"
- More On BlackRock's Plans For Ukraine
- "Seymour Hersh Accuses US of Nord Stream ‘Cover Up’"
And many more.
