Re:Yellen says government will help SVB depositors but rules...
by gamblor956 on Sunday March 12, 2023 @02:59PM
(#35124594)
It's truly bizarre to see all these tech people opining about the financial workings of their companies that they clearly know nothing about.
Your finance department (and I say this as someone that has spent 10+ years working closely with finance departments) is not going to create a new account for every $250k cash your company owns. Full stop. This would be like telling the developers they need to use a separate hard drive every 250kb instead of just using one or two bigger hard drives (in the same computer or server), and to just deal with the hassle of constantly tracking file sizes and moving files around to deal with the rare risk of hard drive failure.
There is an existing solution to securing amounts greater than $250k, and it doesn't involve dozens of bank accounts: treasury bonds (T-bills for short term and T-bonds for longer terms). This is the safest and only way of protecting cash balances in excess of $250k, and it's something that many (but not all) businesses do. (Post 2008, most businesses did this, with the practice dying out over the following decade due to non-existent interest rates. I expect the practice to come back with a vengeance on Monday)
Your finance department (and I say this as someone that has spent 10+ years working closely with finance departments) is not going to create a new account for every $250k cash your company owns. Full stop. This would be like telling the developers they need to use a separate hard drive every 250kb instead of just using one or two bigger hard drives (in the same computer or server), and to just deal with the hassle of constantly tracking file sizes and moving files around to deal with the rare risk of hard drive failure.
There is an existing solution to securing amounts greater than $250k, and it doesn't involve dozens of bank accounts: treasury bonds (T-bills for short term and T-bonds for longer terms). This is the safest and only way of protecting cash balances in excess of $250k, and it's something that many (but not all) businesses do. (Post 2008, most businesses did this, with the practice dying out over the following decade due to non-existent interest rates. I expect the practice to come back with a vengeance on Monday)