Following on yesterday's "Former
FDIC Head Sheila Bair Says The Feds Had Better Explain Exactly Why They
Decided To Bail Out Uninsured Depositors At SVB and Signature"
From The Hill, March 16:
At 6:15 pm eastern time on Sunday, Treasury Secretary Yellen, Fed chair Jerome Powell and FDIC chair Martin Gruenberg issued a statement confirming that the FDIC insurance fund would cover all depositor balances in accounts held at the failed institutions Silicon Valley Bank (SVB) and Signature Bank, even those above the $250,000 FDIC insurance limit.
The statement said that the agency heads were taking the extraordinary action of guaranteeing all deposits in two specific banks using powers available to them under a “systemic risk exception” even though the Dodd-Frank Act specified that the Treasury, FDIC, and Fed should use Orderly Liquidation Authority (OLA) in such a situation.
Banks and Congress should be asking why the administration’s financial regulators did not use OLA.
The government officials’ statement reads in part....
....MUCH MORE
Well, I think a big part of it can be explained by:
At The Intersection Of Power and Money: Bailing Out Silicon Valley
Just as they say in politics, "It's not the crime, it's the coverup"*, so to in the regulatory state, "It's not the fail, it's the bail."
*(came into common usage during Watergate)
