Who said 'Too Big to Fail'? Opinion davidzmorris
The designation cleared the way for the Federal Reserve and Treasury Department toat those banks, instead of limiting protection to the FDIC standard $250,000 per account. Stockholders in the failed banks, on the other hand, will see their equity go to zero, which the Treasury Department points to as another reason this isn’t a “bailout” per se.
Viewed through a broader and longer-term lens, the balance of the weekend’s events would seem to affirm and even amplify the deeply held anxieties of Bitcoiners: that political influence helps determine who does and doesn’t get help from the Federal Reserve, and that a more neutral monetary system would be better for everyone in the long term.A few details about the backstopping of SVB and Signature deposits could be lost in the coming debate about deposit risk.
But there’s an even stronger case for that responsibility than 20/20 hindsight: Silicon Valley Bank also took proactive steps to avoid or rescind rules that would have forced it to take fewer risks. As detailed by the New York Times, Silicon Valley Bank CEO Greg Becker wasWhen things turn, the same big players use their influence to get others to absorb the damage.
Notably, these commenters largely ignored the existence of a receivership process, and went straight to demanding a “bailout” that would make all uninsured deposits whole. This included David Sacks and Jason Calacanis, prominent tech investors and co-hosts of the. Some of Sacks’ foreboding tweets were so unconsidered that Twitter users flagged them with fact checks.
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