Re:How deep is the rot in America’s banking industry?
by mindslight on Thursday March 16, 2023 @05:12PM
(#35188713)
It's hitting the cultural memories of both 2008 (where banks themselves were bailed out) and multiple cryptocurrency exchanges (where "failed" means all deposits vanish).
Then add in some vocal VCs' hypocritical stance on bailouts coupled with Surveillance Valley's overarching hypocritical stance on freedom, and here we are.
It seems that in this day and age of instant communication and social media mobs, even three days is too long for the exact fate of deposits to remain unknown. IMO the right way to proceed is to calmly raise bank capital requirements, create a few new tiers of FDIC coverage (eg coverage on accounts between $250k and $10M is funded from assessment on accounts between $250k and $10M), and institute criminal penalties for executives of banks that go bust beyond their capital buffer (otherwise nothing reigns in TBTF accounts that have too much variance to be absorbed by higher FDIC tiers).
Then add in some vocal VCs' hypocritical stance on bailouts coupled with Surveillance Valley's overarching hypocritical stance on freedom, and here we are.
It seems that in this day and age of instant communication and social media mobs, even three days is too long for the exact fate of deposits to remain unknown. IMO the right way to proceed is to calmly raise bank capital requirements, create a few new tiers of FDIC coverage (eg coverage on accounts between $250k and $10M is funded from assessment on accounts between $250k and $10M), and institute criminal penalties for executives of banks that go bust beyond their capital buffer (otherwise nothing reigns in TBTF accounts that have too much variance to be absorbed by higher FDIC tiers).