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uhsguy · 622 days ago · link · · parent · post: FDIC Creates a Deposit Insurance National Bank of Santa Clara to Protect Insured Depositors of Silicon Valley Bank
Socialized losses. It fixes the liquidity problem because these banks deposits are 100% guaranteed but does nothing to fix the solvency problem that’s going to pop up eventually. There are a bunch of banks that are now effectively insolvent with no mechanism to force a liquidation. Moral hazard 2.0. Also everyone now pays more for insurance on fdic not doing their job.