Mike Masnick ✅Mar 12, 2023

So... the summary is that for all the fear some people had that taxpayers would "bail out billionaires," and the corresponding fear that companies had that "a ton of our money could evaporate and destroy the economy with massive downstream impact"... FDIC/Treasury stepped in and did the right thing: depositors made whole, no taxpayer funds, bank assessment to make up any difference, & SVB equity/unsecured debtholders (mostly) wiped out.

A very good result.

Show threadmacsimconMar 12, 2023
@mmasnick it’s not a very good result because when the banks have to pay for SVB, they’ll just raise rates on the rest of us to compensate.
Show threadThomas H Jones II

@macsimcon @mmasnick Every participating institution already pays in/has the cost of potential rescues on their books.

In a competitive banking market, any given bank "raising rates on the rest of us" potentially provides advantage to their competitors.

Mar 12, 2023 at 11:20pmMastodon for Android
Show threadmacsimconMar 15, 2023
@ferricoxide @mmasnick That’s naive. If one big bank raises fees, the other four will too. Want proof? Two payment processors were already not refunding processing fees on chargebacks, so Square finally did the same. It didn’t require collusion, Square just felt they were leaving money on the table as their competitors were already not refunding those fees. In a market with few competitors (thanks deregulation), that’s how it goes.
Show threadThomas H Jones IIMar 15, 2023

@macsimcon @mmasnick

See: "In a competitive banking market".