"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.
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.