Nearly half the money — $143 billion — went to holding companies for the two major banks that failed over the past week, Silicon Valley Bank and Signature Bank, triggering widespread alarm in financial markets.
Silicon Valley Bank Bridge Bank is not Silicon Valley Bank. All of the executives were fired, the board was fired, and all of the shareholders (the owners) lost all of their money and don't get shares of the FDIC bridge bank in return. That is not a bailout. Doing the BTFP two weeks ago and letting them dump their shitty treasury portfolio on the Fed in return for liquity would have been a bailout.
Depositors are not shareholders. Unless you are banking with a credit union, you aren't a shareholder in whatever bank you keep your money in. If your bank fails and your money is all gone, does the FDIC kicking mean that you received a bailout?
I don't have an concrete answer as to what the lifting of the cap on deposit insurance should be called. I have already said that I lean towards thinking that the FDIC shouldn't have raised the cap and there should have been some level of payroll protection instead. But that's not SVB getting bailed out, that's SVB's depositors.
The vast majority of everyone involved is getting bailed out and the bank continues to operate just under new management
Silicon Valley Bank Bridge Bank is not Silicon Valley Bank. All of the executives were fired, the board was fired, and all of the shareholders (the owners) lost all of their money and don't get shares of the FDIC bridge bank in return. That is not a bailout. Doing the BTFP two weeks ago and letting them dump their shitty treasury portfolio on the Fed in return for liquity would have been a bailout.
Depositors are not shareholders. Unless you are banking with a credit union, you aren't a shareholder in whatever bank you keep your money in. If your bank fails and your money is all gone, does the FDIC kicking mean that you received a bailout?
I don't have an concrete answer as to what the lifting of the cap on deposit insurance should be called. I have already said that I lean towards thinking that the FDIC shouldn't have raised the cap and there should have been some level of payroll protection instead. But that's not SVB getting bailed out, that's SVB's depositors.