Our President and Treasury Secretary have been saying for weeks that American taxpayers will not pay for the losses at Silicon Valley Bank. What’s the truth? The FDIC after selling the banks’ assets and liquidating other assets had to withdraw $20 billion from their reserves account to make SVB depositors whole. But, 96% of these depositors had balances over $250k and were not supposed to be insured by the FDIC, but the FDIC, the Fed, the Treasury and our President agreed to make these wealthy depositors whole.
At end of 2022 the FDIC had $128 billion in their reserves account and now has $108 billion remaining. Now the FDIC is going to levy a special assessment (tax) on banks to replenish these funds. Who will ultimately pay for this special assessment or tax? It’s going to be bank depositors or U.S. consumers.
Further I read that at the end of 2019 FDIC banks had roughly $12 trillion on deposit almost evenly split between insured deposits and un-insured deposits. Today, there is $17.9 trillion in banks thanks to trillions of dollars in money printing and money handed out to U.S. consumers during Covid. But, now only 41% of FDIC deposits are “insured” at $7.4 trillion and 59% of FDIC deposits are “un-insured” at $10.5 trillion.
But, if a BIG bank is considered a systemic risk by Chairman Powell, Secretary Yellen, FDIC Chairman Martin Gruenberg, and President Biden their depositors including un-insured depositors will almost certainly be bailed out and made whole by the FDIC and when the FDIC runs out of money the Treasury or U.S. taxpayers will provide the rest of the money. OMG!!!