On Friday, federal authorities shut down Silicon Valley Bank, one of the tech industry’s top banks, in the largest bank failure since 2008 and reportedly the second-largest in US history.
Fears loomed over the weekend before, on Sunday, a joint statement from the US Treasury, the Federal Reserve, and the FDIC announced that Washington is guaranteeing all deposits at the California-based bank. They promised that the bailout – which they emphasize is not a bailout – will not be at the taxpayers expense.
“Depositors will have access to all of their money starting Monday, March 13,” the statement proclaimed. “No losses associated with the resolution of Silicon Valley Bank will be borne by the taxpayer.” That’s a government promise, so it’s probably safe to assume the opposite is true.
Rather than burdening taxpayers to cover the deposits, according to the agencies the costs of the deposits will be paid by the agency's Deposit Insurance Fund. That reserve that is paid by a quarterly fee on banks – what luck that the federal government found a pot of money to cover this crisis!
According to NBC News, in December, SVB had $209 billion in assets with more than $175 billion in deposits. FDIC-member banks deposits are insured up to $250,000 per depositor, though it appears the guarantees also include amounts above $250.000 based on reporting. The government also took over and shut down New York-based Signature Bank, and Sunday’s announcement includes depositors of that bank as well.
Those being bailed out apparently include the Chinese Communist Party, at least according to the South China Morning Post.
“The collapse of Silicon Valley Bank (SVB) has created a sense of panic within China’s tech start-up and venture capital (VC) sector, as the lender served as a bridge between US capital and Chinese tech entrepreneurs.
Do the depositors being reimbursed by the totally-not-taxpayer money include the Chinese Communist Party? How many more banks do you plan on bailing out?
I’d like to go on the record as opposed to bailing out banks. As my legislator, please represent my interests above foreign investors and domestic corporations.
Remember your oath.