[tempestn]

So what is the risk premium they were collecting? The time savings of not managing multiple accounts? Is it really desirable for larger depositors to carry the inefficiency of spreading their deposits across multiple banks, if the net liabilities of the banks end up being the same?

[dtf]

The risk premium was access to a large and very cheap credit facility:

https://twitter.com/jonwu_/status/1634250770555219970

[r_hoods_ghost]

Net doesn't matter to the individual firm. And who should carry it? Everyone else who had the gumption to spend, what, a few man hours, to guarantee that they won't end up not being g able to make pay roll?

[331c8c71]

Doesn't matter. The rules are the rules.

[331c8c71]

There should have been

1) repayment of the insured amounts

2) liquidation of assets

3) repayment of the rest (likely with a haircut).

4) (optionally) a legislative reform (if the current system seems not adequate anymore)