Yellen says government will help SVB depositors but rules out bailout

Re:Yellen says government will help SVB depositors but rules... by mlyle on Sunday March 12, 2023 @02:54PM (#35124517)

Yup, and presumably they're a lot less worried. :)

If you use multiple banks, you have a higher risk of experiencing a bank failure, but it has less of a consequence on your operations, liquidity, and viability if it should happen.

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Re:Yellen says government will help SVB depositors but rules... by closeparen on Sunday March 12, 2023 @03:36PM (#35125106)

Even if you have 10 banks, losing 10% of your working capital is a huge deal, no?

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Re:Yellen says government will help SVB depositors but rules... by mlyle on Sunday March 12, 2023 @04:13PM (#35125603)

Here, it's more like losing access to the amount of that is above $250k for some time, and maybe losing 5-40% of that amount forever. So, (0.1 * x - 250000) * 0.4.

So if you use IntraFi to place across 10 banks, and you have $10M, maybe you lose $300k.

It is a risk... but there's plenty of ways to lose a few percent of your working capital that are out of your control.

If you want to further reduce the risk, you could do additional things (e.g. buy some T-bills).

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Re:Yellen says government will help SVB depositors but rules... by omginternets on Sunday March 12, 2023 @04:59PM (#35126213)

Well, no. My employer for example was banking at SVB and FRB, in no small part because it was difficult for them do bank elsewhere.

And there are many others in the same boat.

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