FDIC Takes over Silicon Valley Bank

Re:FDIC Takes over Silicon Valley Bank by suresk on Friday March 10, 2023 @01:14PM (#35098502)

1:1 banking essentially guarantees long-term loss of principal for depositors, albeit slowly. The main "service" a bank would provide in that scenario is holding onto your money for you and instead of paying interest on it, charging you a few percent per year to hold onto it for you.

Also, in your model, where does money for loans come from? How are borrowing costs impacted by a major source of funds for loans going away?

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Re:FDIC Takes over Silicon Valley Bank by zerbinxx on Friday March 10, 2023 @08:05PM (#35103831)

Ironically, returns on bank savings accounts have been so low for so long that my present APR of like 1% is functionally the same as if they just held onto the money for me. That would probably do a great deal to explain why no one uses savings accounts anymore

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