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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 twblalock on Sunday March 12, 2023 @09:44PM (#35129613)
> One part of the bailout is depositors over $250k getting a new FDIC guarantee.

Not really. It's not like the FDIC would normally give everyone $250k and then light the bank's remaining money on fire. If there is money left over after depositors all get their $250k, the depositors have a claim on that money too.

Thought experiment: Consider a bank with only one customer. Let's say that customer had a million dollars in an account. The bank fails. That customer gets $250k. The FDIC finds out that another half a million is left over. The customer gets that too. The shareholders get shafted because they don't get anything because the depositors have precedence over the shareholders. Shareholders are the last ones to get paid, if there is anything left.

This is not a bailout. It's the way things normally work.

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Re:FDIC Establishes Signature Bridge Bank, N.A., As Successo... by hypothesis on Sunday March 12, 2023 @10:01PM (#35129803)
Your claim appears contradictory to what being reported in financial news though.

[0] https://twitter.com/colbyLsmith/status/1635061613920395264

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Re:FDIC Establishes Signature Bridge Bank, N.A., As Successo... by Thorrez on Sunday March 12, 2023 @10:25PM (#35130077)
That's supporting the second part of simple-thoughts's comment. It's unclear to me whether twblalock was arguing against that or not.
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Re:FDIC Establishes Signature Bridge Bank, N.A., As Successo... by hypothesis on Sunday March 12, 2023 @10:46PM (#35130314)
To me it seems like it is confirming the quote that he was arguing against.

Also, here is a POTUS tweet taking credit for a literal depositors “bailout”.

[0] https://mobile.twitter.com/POTUS/status/1635080376572956672

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Re:FDIC Establishes Signature Bridge Bank, N.A., As Successo... by twblalock on Sunday March 12, 2023 @11:13PM (#35130525)
The President never used the word “bailout”. And that’s because this is not a bailout. Taxpayers aren’t on the hook for a penny, and the money is going to depositors not the people who caused the problem.
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Re:FDIC Establishes Signature Bridge Bank, N.A., As Successo... by hypothesis on Sunday March 12, 2023 @11:27PM (#35130614)
Now, I have no knowledge if Biden himself tweeted that.

But would you retweet something that calls your actions “bailout”? Especially if you don’t want it to be called as such?

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Re:FDIC Establishes Signature Bridge Bank, N.A., As Successo... by peyton on Sunday March 12, 2023 @11:52PM (#35130783)
The NYTimes tweet also says federal officials closed a bank, when it was state officials who closed the bank. I don’t think the Biden administration is endorsing the NYTimes weekend social media person’s summary.

The article says the Treasury wanted to emphasize that this action is not a bailout.

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Re:FDIC Establishes Signature Bridge Bank, N.A., As Successo... by hypothesis on Monday March 13, 2023 @12:04AM (#35130896)
You would think that there are people around POTUS who would understand PR, but maybe it’s just doesn’t matter anymore?
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Re:FDIC Establishes Signature Bridge Bank, N.A., As Successo... by brewdad on Monday March 13, 2023 @02:12AM (#35131801)
There’s nobody left on Twitter except bots shouting at each other, so does it really matter?
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Re:FDIC Establishes Signature Bridge Bank, N.A., As Successo... by Thorrez on Sunday March 12, 2023 @10:25PM (#35130072)
Are you arguing about against just the first part of simple-thoughts's comment, or against both parts?
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Re:FDIC Establishes Signature Bridge Bank, N.A., As Successo... by FormerBandmate on Sunday March 12, 2023 @09:57PM (#35129753)
100% of deposits will be covered now tho, instead of 95%
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Re:FDIC Establishes Signature Bridge Bank, N.A., As Successo... by dmix on Sunday March 12, 2023 @09:58PM (#35129763)
It always works that way in practice, but I still think announcing the guarantee so early may have been a thing to calm the market. It is likely they just looked at the assets and figured out how to cover it all without dipping into some other gov $$, as part of the sale of the business. And something to do with finding a buyer for the mortgage security that they had (just speculating).
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Re:FDIC Establishes Signature Bridge Bank, N.A., As Successo... by ZachPruckowski on Sunday March 12, 2023 @10:00PM (#35129781)
Looking at your thought experiment, the difference is whether that customer gets $500K (all of the bank's assets are sold to make him whole[1]) or $1M - all the banks assets are sold, and also he gets another $500K from the FDIC.

[1] - the $250K insurance is normally only supposed to apply if there are insufficient assets to cover it. Unless I'm misunderstanding your wording and the bank in the thought experiment has $750K in assets.

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Re:FDIC Establishes Signature Bridge Bank, N.A., As Successo... by opportune on Monday March 13, 2023 @12:39AM (#35131149)
The federal reserve purchasing securities at par is money printing/debasement, since those securities have lower fair market values.

The increased insurance on everyone else to cover actual losses to unsecured deposits is just a small tax on every other banking customer

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