False (at least in this case). From the Treasury’s statement: “No losses associated with the resolution of Silicon Valley Bank will be borne by the taxpayer.”
"In a separate announcement, the Fed late Sunday announced an expansive emergency lending program that's intended to prevent a wave of bank runs that would threaten the stability of the banking system and the economy as a whole."
"The Treasury has set aside $25 billion to offset any losses incurred under the Fed’s emergency lending facility."
If it looks like a duck, swims like a duck, and quacks like a duck, then it probably is a duck.
I don't think it's nearly clear enough at this point to trust a politically-loaded statement like that, straight from the horse's mouth. There are a lot of ways to obscure this, through inflating the money supply or deferring costs for years or (most insidiously) moving risk around. The money is apparently coming from a special assessment on all other banks in the US; will the customers of those banks see themselves paying more in fees or earning less in interest as a result? Does this drain whatever reserves FDIC has, possibly requiring it to draw funds from the taxpayer in the future when something else bad happens? How does this affect the risk decisions made by other banks, knowing they will be backstopped by the public if, like someone with a bomb strapped to their chest, they promise to take everyone down with them? Apparently SVB was offering loans on very appealing terms to tech companies if they kept deposits at the bank. Companies made the decision to take those terms, accepting the counterparty risk in lieu of paying higher interest on loans from other, more stable banks. Over and over we hear that financial returns are justified because of the risks taken. So is that just a sham, then?
"In a separate announcement, the Fed late Sunday announced an expansive emergency lending program that's intended to prevent a wave of bank runs that would threaten the stability of the banking system and the economy as a whole."
"The Treasury has set aside $25 billion to offset any losses incurred under the Fed’s emergency lending facility."
If it looks like a duck, swims like a duck, and quacks like a duck, then it probably is a duck.
sokoloff|3 years ago
Ref: https://home.treasury.gov/news/press-releases/jy1337
adad95|3 years ago
"In a separate announcement, the Fed late Sunday announced an expansive emergency lending program that's intended to prevent a wave of bank runs that would threaten the stability of the banking system and the economy as a whole."
"The Treasury has set aside $25 billion to offset any losses incurred under the Fed’s emergency lending facility."
If it looks like a duck, swims like a duck, and quacks like a duck, then it probably is a duck.
hartator|3 years ago
Even if its coming from other banks, it means they have to increase fees somewhere.
ahelwer|3 years ago
unknown|3 years ago
[deleted]
twisteriffic|3 years ago
Tell me you didn't read the article without telling me you didn't read the article.
adad95|3 years ago
"In a separate announcement, the Fed late Sunday announced an expansive emergency lending program that's intended to prevent a wave of bank runs that would threaten the stability of the banking system and the economy as a whole."
"The Treasury has set aside $25 billion to offset any losses incurred under the Fed’s emergency lending facility."
If it looks like a duck, swims like a duck, and quacks like a duck, then it probably is a duck.
hartator|3 years ago
encoderer|3 years ago
throwawaysleep|3 years ago