RPGR90s
Member
It's kind of surprising that folks don't seem to understand banking and are unaware of how the FDIC works.
The 2008 collapse was brought about through the sale of CDOs (Collateralized Debt Obligations) and this doesn't have any of that in it that I can see. This was driven by bad investments by the bank, not sale of high risk investment instruments on Wall Street.
It's entirely different. Your tax dollars aren't going to be involved in making the depositors whole, the Federal Depositors Insurance Company will ensure they are reimbursed via the insurance funds SVB paid into FDIC.
I've always been curious on how the FDIC can insure money that it doesn't have. Since it was created by Congress, does it have an actual budget that it can use to invest in case money needs to be paid out?
I mean, if my bank failed and I lost $250,000, would the FDIC go to the Federal Reserve and print more paper to give me or would they have it in an account, ready to go?