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A comment on FDIC Establishes Signature Bridge Bank, N.A., As Successor to Signature Bank. Parent comment

Re:FDIC Establishes Signature Bridge Bank, N.A., As Successo... by stefan_ on Sunday March 12, 2023 @08:51PM (#35129015)
There is a persistent misunderstanding here. The equity of the bank itself is not particularly interesting, given its usually a small fraction of deposits managed. No, the bailout part is them covering deposits over $250k, the limit plain to see for anyone that has ever entered a bank.
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Re:FDIC Establishes Signature Bridge Bank, N.A., As Successo... by khuey on Sunday March 12, 2023 @08:56PM (#35129062)
It's worth remembering that not every "bailout" wipes out equity holders. Citigroup and AIG were both bailed out during the financial crisis and their equity survived (although with heavy losses).
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Re:FDIC Establishes Signature Bridge Bank, N.A., As Successo... by colechristensen on Sunday March 12, 2023 @10:28PM (#35130102)
That is why those were bailouts and this is not. Shareholders are not being protected.
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Re:FDIC Establishes Signature Bridge Bank, N.A., As Successo... by stefan_ on Sunday March 12, 2023 @10:32PM (#35130159)
Many things can be a bailout. I'm just calling it how I see it: this bank has assets that are likely less than the sum of its deposits. To make them whole despite this is a bailout, and particularly so when it's above the previously agreed on limit.

Maybe you just have an unnatural aversion to the word or something.

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Re:FDIC Establishes Signature Bridge Bank, N.A., As Successo... by colechristensen on Sunday March 12, 2023 @10:35PM (#35130194)
The bank is gone, it’s not being bailed out it no longer exists. It has in entirely been taken by the fdic and will be parted up and sold for the benefit of those the former bank owed money to (to wit, those who deposited money with it)
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Re:FDIC Establishes Signature Bridge Bank, N.A., As Successo... by the_optimist on Sunday March 12, 2023 @09:38PM (#35129546)
No. The banks are charged for that insurance. They provide the funds. There is no bailout. Using the equity buffer for coverage is _the whole point_.
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Re:FDIC Establishes Signature Bridge Bank, N.A., As Successo... by anon291 on Sunday March 12, 2023 @09:45PM (#35129624)
The premium is set for 250k. Not unlimited. I'd have no problem with unlimited insurance schemes for deposits so long as the premiums are priced to reflect that
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Re:FDIC Establishes Signature Bridge Bank, N.A., As Successo... by the_optimist on Monday March 13, 2023 @02:45AM (#35131983)
The FDIC has not identified any loss assistance required for the “unlimited” guarantee. That is: the equity buffer covered it.
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