"As with the resolution of Silicon Valley Bank, no losses will be borne by the taxpayer," the statement added.
Looks like the feds and the Fed are using the latter's money so far. Someone who better understands economics can correct me if I'm wrong but so far so good as far as not using taxpayer money to bail these scumbags out.
I think things start to get interesting though if the regulator can't raise enough money from the sale of SVB's assets to offset the deposits. Then the government will have to cover the deposits with "tax-payer dollars"; however, this was always going to be the case with the $250k deposit insurance. That is be definition tax-payers covering deposit losses.
I think things start to get interesting though if the regulator can't raise enough money from the sale of SVB's assets to offset the deposits.
The Fed can cheat on that by taking the bank's held-to-maturity securities onto its own balance sheet. It's a bailout "in the present" but will pay itself off because the Treasury never defaults.
Yep. That's what caused this in the first place, at least partly. But in this case apparently the funds being used for the bailout 1. come from a fund the banks themselves fund, and 2. only protect depositors, everyone else is being wiped out.
Hmm. Banks are bulletproof. Taxpayers assume all risk, all the time.
Looks like the feds and the Fed are using the latter's money so far. Someone who better understands economics can correct me if I'm wrong but so far so good as far as not using taxpayer money to bail these scumbags out.
I think things start to get interesting though if the regulator can't raise enough money from the sale of SVB's assets to offset the deposits. Then the government will have to cover the deposits with "tax-payer dollars"; however, this was always going to be the case with the $250k deposit insurance. That is be definition tax-payers covering deposit losses.
The Fed can cheat on that by taking the bank's held-to-maturity securities onto its own balance sheet. It's a bailout "in the present" but will pay itself off because the Treasury never defaults.
I’d be shocked if they did, but they could go the Covid route and simply print more money
Keep in mind, printing another trillion is "not using taxpayer money."
Yep. That's what caused this in the first place, at least partly. But in this case apparently the funds being used for the bailout 1. come from a fund the banks themselves fund, and 2. only protect depositors, everyone else is being wiped out.