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Re:FDIC Takes over Silicon Valley Bank by xhrpost on Friday March 10, 2023 @01:41PM (#35098954)
I don't think they "have" to pay the higher interest. Wouldn't they ultimately get that interest from parking money at the Fed over night? A bank isn't going to pay interest on money that results in a net loss, either they get it from the Fed or they are making private loans at a higher rate. Otherwise there would be no incentive to increase deposits as each would result in lost profits.
Re:FDIC Takes over Silicon Valley Bank by tlb on Friday March 10, 2023 @01:47PM (#35099044)
A bank either pays competitive deposit interest rates, or people move their deposits elsewhere. That can happen quite quickly, and they'd have the same liquidity problem.