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by masterjack 1192 days ago
Are you really suggesting they open up 20 different bank accounts? And not only pay the monthly account fees but also pay a bookkeeper to upload statements for all 20 banks into the accounting system? And have appropriate controls on all money movements? And float money between the accounts each time payroll or some large expense is run? And follow the financial results of all of those banks in order to find signs of weakness?

Id rather be in a world where businesses don’t have to spend so much time playing games with their bank accounts and just trust that their money is safe, which is why the fdic needs to guarantee the deposits.
5 comments
shadowgovt 1192 days ago
That sounds like just another cost of doing business.

Companies RAID-stripe the data on their hard drives, they can pay somebody to spread the risk in their finances.

(At a certain scale this eventually becomes inevitable. Google actually has a huge real estate and finances arm precisely because they have the kind of money pool that is impacted by things like nation-state failure and changes to the tax code in 50 states).

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rugaeiou 1191 days ago
Just search for insured cash sweep accounts

There are many many banks that offer this . It doesn't even have to be a TBTF Bank

Infact, SVB itself offered and those funds are protected

https://pilot.com/blog/svb-faq

What about my cash sweep account? So, here’s the good thing about the cash sweep account: the assets held in the cash sweep account aren’t bank deposits or on SVB’s balance sheet—they’re held by a third-party custodian. So our understanding is you should be able to recover 100% of the funds there, regardless of what happens to the uninsured deposits at SVB.

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FartyMcFarter 1192 days ago
> Are you really suggesting they open up 20 different bank accounts?

No. I said that putting all the money in one bank account is not extremely prudent, which seems obvious given the circumstances.

I'm pretty sure that there are individuals paying attention to this, so I don't think it's too weird to ask businesses to do so as well.

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QuercusMax 1192 days ago
Services like this exist: https://www.investopedia.com/terms/c/certificate-of-deposit-...
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klipt 1192 days ago
> And follow the financial results of all of those banks in order to find signs of weakness?

Well no, if all your deposits are below the 250k fully insured limit, then you don't have to worry about the banks collapsing.

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