Re:FDIC accidentally reveals the Silicon Valley Bank deposit...
by dmurray on Tuesday November 05, 2024 @03:05AM
(#42049556)
I skimmed a couple of sources and thought I caught that First Citizens paid zero, net of some guarantees, for "all of SVB's assets and liabilities".
That was wrong: it looks like the price was more like negative 16.5 billion [0] so that was the cost to the FDIC.
I agree with other commentators that even if the price was zero and the guarantees to FCB were never tested, the taxpayers still paid money in expectation - they took a bet without getting paid for the potential downside. I don't really agree with characterizations [1] of the deposit insurance fund as "not being from the taxpayers" - a fee on bank deposits is in other countries described as a tax, and even if not, the DIF is at least backstopped by the taxpayer.
That was wrong: it looks like the price was more like negative 16.5 billion [0] so that was the cost to the FDIC.
I agree with other commentators that even if the price was zero and the guarantees to FCB were never tested, the taxpayers still paid money in expectation - they took a bet without getting paid for the potential downside. I don't really agree with characterizations [1] of the deposit insurance fund as "not being from the taxpayers" - a fee on bank deposits is in other countries described as a tax, and even if not, the DIF is at least backstopped by the taxpayer.
[0] https://www.theguardian.com/business/2023/mar/27/silicon-val...
[1] https://apnews.com/article/svb-banks-fdic-first-citizen-sili...