The government’s response to the failure of two large banks has already involved hundreds of billions of dollars. So will ordinary Americans end up paying for it, one way or another?
WASHINGTON — And what will the price tag be?
Taxpayers will probably bear no direct cost for the failure of Silicon Valley Bank and Signature Bank. But other banks may have to help defray the cost of covering uninsured deposits. Over time, those banks could pass higher costs on to customers, forcing everyone to pay more for services.HOW IS THE RESPONSE BEING PAID FOR?
If necessary, the insurance fund will be replenished by a “special assessment” on banks, the FDIC, Fed and Treasury said in a joint statement. Though the cost of that assessment could ultimately be borne by bank customers, it’s not clear how much money would be involved. “No losses associated with the resolution of Silicon Valley Bank will be borne by the taxpayer,” read the joint statement from the Treasury, Fed and FDIC.
“Saying that the taxpayer won’t pay anything ignores the fact that providing insurance to somebody who didn’t pay for insurance is a gift,” said Anil Kashyap, an economics professor at the University of Chicago. “And that’s kind of what happened.”Biden and other Democrats in Washington deny that their actions amount to a bailout of any kind.
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