• This is a political forum that is non-biased/non-partisan and treats every person's position on topics equally. This debate forum is not aligned to any political party. In today's politics, many ideas are split between and even within all the political parties. Often we find ourselves agreeing on one platform but some topics break our mold. We are here to discuss them in a civil political debate. If this is your first visit to our political forums, be sure to check out the RULES. Registering for debate politics is necessary before posting. Register today to participate - it's free!

Biden's statement on SVB

It will be interesting to see if bank fees rise in the next few months as a result of this.
 
CaughtInThe said:
It's almost like what, you know, almost everyone wants...


Click to expand...

Exactly how is Biden guaranteeing the deposits with out spending tax payer money? The government has no money except tax payer money. Another promise by Biden, like paying off college loans, nobody will pay higher taxes, he will represent all americans, the border is closed, we have a record low on fentanyl in the US., If you get the shot you will not get sick. Joe, Joe, Hoe. LOL.
 
Then he of course took questions to address concerns and temper skepticism, right?

 
Aren't you guys glad the big bad government stepped in and stopped the economy from crashing because of a few dudes who made horrible decisions?

Now you don't have to suffer.
 
Integrityrespec said:
Exactly how is Biden guaranteeing the deposits with out spending tax payer money?
Click to expand...
By the terms of a sale to another bank.
Integrityrespec said:
The government has no money except tax payer money. Another promise by Biden, like paying off college loans, nobody will pay higher taxes, he will represent all americans, the border is closed, we have a record low on fentanyl in the US., If you get the shot you will not get sick. Joe, Joe, Hoe. LOL.
Click to expand...
I think you might have glitched there buddy, you ok?
 
These banks made risky investments and weren't capitalized enough. The FDIC usually only guarantees $250K per depositor account. So, people with larger accounts might not get remunerated. Betting on risky investments to get higher returns is a systemwide financial problem.
 
grip said:
These banks made risky investments and weren't capitalized enough. The FDIC usually only guarantees $250K per depositor account. So, people with larger accounts might not get remunerated. Betting on risky investments to get higher returns is a systemwide financial problem.
Click to expand...
No investors or bonds holders are being made whole , only people with deposits.
 
grip said:
These banks made risky investments and weren't capitalized enough. The FDIC usually only guarantees $250K per depositor account. So, people with larger accounts might not get remunerated. Betting on risky investments to get higher returns is a systemwide financial problem.
Click to expand...

Depositors in a bank liquidation would be classified as the primary creditor, then bond holders, then shareholders.

If I recall correctly
 
Lord Tammerlain said:
Depositors in a bank liquidation would be classified as the primary creditor, then bond holders, then shareholders.

If I recall correctly
Click to expand...
Other way around. Creditors and bond holders first, then shareholders, then stockholders, then depositors.
 
Napoleon said:
Other way around. Creditors and bond holders first, then shareholders, then stockholders, then depositors.
Click to expand...
Not in this instance. FDIC funds will honor the deposits and payroll for non management employees but not creditors, bond holders investors or management.
 
Callen said:
Not in this instance. FDIC funds will honor the deposits and payroll for non management employees but not creditors, bond holders investors or management.
Click to expand...
No, FDIC has committed to leveraging some new loan program that is clear as mud for the depositors. The creditors, bond holders, and investors will still get their slice from the asset sale.
 
Napoleon said:
No, FDIC has committed to leveraging some new loan program that is clear as mud for the depositors. The creditors, bond holders, and investors will still get their slice from the asset sale.
Click to expand...
That is not my understanding. Regardless, the asset sale will come nowhere close to making the investors, etc, whole.
 
grip said:
These banks made risky investments and weren't capitalized enough. The FDIC usually only guarantees $250K per depositor account. So, people with larger accounts might not get remunerated. Betting on risky investments to get higher returns is a systemwide financial problem.
Click to expand...
The banking deregulation during the Trump administration was instrumental in allowing more risks to be taken by bankers. Sadly undoing those changes will require a vote in the House. Meanwhile the Fed is perfectly able to use FDIC funds to make all depositors whole which is what they are doing.

Trump Is Deregulating Banks: Here's What That Means for You​

The Dodd-Frank Act of 2010 Regulated Banks​

The Obama administration enacted the Dodd-Frank Act in 2010 to help avoid future meltdowns in financial markets — and the massive government bailouts that follow. Essentially, the law recognized that many banks are so important to the economy that they must be rescued from complete collapse in times of trouble.

Dodd-Frank identified certain banks as being systemically important financial institutions (SIFIs) that need to operate by certain rules to protect their assets. These rules prevent banks that take customer deposits from making risky bets on the financial markets, mandate the size of banks’ capital reserves — or how much cash they have on hand — and require banks to perform routine “stress tests” that simulate a crisis to see if they can remain solvent.

https://www.nasdaq.com/articles/trump-deregulating-banks-heres-what-means-you-2019-02-12
 
Napoleon said:
Other way around. Creditors and bond holders first, then shareholders, then stockholders, then depositors.
Click to expand...
By law, after insured depositors are paid, uninsured depositors are paid next, followed by general creditors and then stockholders. In most cases, general creditors and stockholders realize little or no recovery. Payments of uninsured funds only, called dividends, depend on the net recovered proceeds from the liquidation of the bank's assets and the payment of bank liabilities according to federal statute. While fully insured deposits are paid promptly after the failure of the bank, the disbursements of uninsured funds may take place over several years based on the timing in the liquidation of the failed bank assets.
Click to expand...

FDIC: When a Bank Fails - Facts for Depositors, Creditors, and Borrowers

www.fdic.gov

According to the FDIC what I said is correct
 
iguanaman said:
The banking deregulation during the Trump administration was instrumental in allowing more risks to be taken by bankers. Sadly undoing those changes will require a vote in the House. Meanwhile the Fed is perfectly able to use FDIC funds to make all depositors whole which is what they are doing.

Trump Is Deregulating Banks: Here's What That Means for You​

The Dodd-Frank Act of 2010 Regulated Banks​

The Obama administration enacted the Dodd-Frank Act in 2010 to help avoid future meltdowns in financial markets — and the massive government bailouts that follow. Essentially, the law recognized that many banks are so important to the economy that they must be rescued from complete collapse in times of trouble.

Dodd-Frank identified certain banks as being systemically important financial institutions (SIFIs) that need to operate by certain rules to protect their assets. These rules prevent banks that take customer deposits from making risky bets on the financial markets, mandate the size of banks’ capital reserves — or how much cash they have on hand — and require banks to perform routine “stress tests” that simulate a crisis to see if they can remain solvent.

https://www.nasdaq.com/articles/trump-deregulating-banks-heres-what-means-you-2019-02-12
Click to expand...

SVB has about $175 billion in total deposits, the FDIC has only $128 billion in funds. They'll have to sell off some of the bank's assets to make all depositors whole.
 
Napoleon said:
Other way around. Creditors and bond holders first, then shareholders, then stockholders, then depositors.
Click to expand...
Where'd you get that from? Bond holders are creditors; shareholders are stockholders.

Depositors are creditors; they're called "demand" deposits for a reason.
 
grip said:
SVB has about $175 billion in total deposits, the FDIC has only $128 billion in funds. They'll have to sell off some of the bank's assets to make all depositors whole.
Click to expand...
The FDIC isn't expected to spend all of its funds. They're expected to have to sell some of the bank assets to make depositors whole. The right side of the balance sheet has a claim on the left side.
 
reflechissez said:
Where'd you get that from? Bond holders are creditors; shareholders are stockholders.

Depositors are creditors; they're called "demand" deposits for a reason.
Click to expand...


Stockholders and shareholders are not creditors.

They are part owners.

They are Owners Equity. Not a liability. The company isn't obligated to give them anything beyond ownership in the company. If there are profits then the profits are distributed to the shareholders and stockholders. The only way a shareholder or stockholder can get their money back is by selling the asset which is stock ownership in the company.

The company doesn't owe them any money.

A creditor is an entity that a company owes money to.

A depositor is a liability. The bank is obligated to give that depositor their money back when the depositor asks for it.
 
Last edited:
It would be funny if somebody did a thread having Biden respond to this situation the same way that trump responded to COVID. You know, with his comments about how it was going to disappear and it's nothing worse than a common cold and all that other bullshit. And his balcony moment.
 
Very impressive how decisive and fast Biden and Yellen were in dealing with this. Quick action us what was needed and that's what they did
 
You must log in or register to reply here.
Back
Top Bottom