Yellen says government will help SVB depositors but rules out bailout

Re:Yellen says government will help SVB depositors but rules... by yibg on Sunday March 12, 2023 @03:11PM (#35124769)

One thing I don’t get. People are making a few claims:

1) anything beyond 250k is a known risk, you should’ve spread the money around.

2) why should tax payers be on the hook for more than the 250k amount? The companies took the risk and lost.

But if everyone spread their money around and kept each account less than 250k. Then in effect isn’t everyone insured for everything anyways?

Imagine there is a service that seamlessly took your total amount and spread it between various accounts for you to keep each account balance less than 250k. Now the totality of bank deposits are in effect all 100% insured. How is this now different from insuring all deposits regardless of size besides adding a middleman?

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Re:Yellen says government will help SVB depositors but rules... by chrisbolt on Sunday March 12, 2023 @05:00PM (#35126214)

The deposits are spread over a more diversified set of banks and the risk is reduced.

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Re:Yellen says government will help SVB depositors but rules... by yibg on Sunday March 12, 2023 @08:26PM (#35128810)

Not for FDIC. 10 people each with 1mm in 10 different banks. If FDIC covers the entire amount when 1 bank fails, they pay 10mm. If all 10 people spread 100k across 10 different banks and 1 bank fails, FDIC pays 100k x 10 which is still 1mm.

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Re:Yellen says government will help SVB depositors but rules... by CJefferson on Sunday March 12, 2023 @08:02PM (#35128522)

For many people, and companies, there are not enough banks for them to do that.

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