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by quadrifoliate 1199 days ago
As long as the Fed is making up rules on the spot, they could make up a fund to pay employees of the depositors directly in the short term, and start liquidating any assets of Silicon Valley Bank to pay for those. Call it, say, the Silicon Valley Bank Victims Fund.

Avoids the moral hazard created by propping up SVB while still keeping workers paid. But I bet that would be showcased by the upper class as a "handout".
3 comments
zopa 1199 days ago
By Monday morning? With protections in place against fraud or double-dipping? It wouldn’t be as easy as you think.

(And for the nth time, SVB isn’t being propped up. The owners are losing their whole stake.)

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quadrifoliate 1199 days ago
> By Monday morning? With protections in place against fraud or double-dipping? It wouldn’t be as easy as you think.

But you are somehow convinced that this fund [1] created in 1 day by the Fed to solve "temporary liquidity issues" with vague promises of "loans against securities" and "assessment charged on the banks" will be entirely free of fraud or double-dipping?

Everything involving money has the potential for fraud and double-dipping, and the banking sector has a ton of it. We can figure it out and prosecute people afterwards (or not, it's not like senior management at SVB is going to be prosecuted).

> (And for the nth time, SVB isn’t being propped up. The owners are losing their whole stake.)

Oh sure, three Federal departments make a joint statement on the weekend and create a new liquidity fund every time a company goes bankrupt. Nothing to see here!

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[1] https://www.federalreserve.gov/newsevents/pressreleases/mone...

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insanitybit 1198 days ago
This is such an absurd idea to implement in a weekend, you have to see that, right?
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quadrifoliate 1198 days ago
Sure, but why is it any more absurd than creating a fund out of thin air to guarantee SVB deposits?

Money provided to individuals is highly trackable; ask anyone with student loans. And this would give the former SVB's employees something to do past the current 45-day window. More employment for the win!

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insanitybit 1198 days ago
Creating a system to work with one entity, especially a bank, is far easier than creating one to work with 10s of thousands of individuals, not to mention that you can do this work all abstracted behind the bank without any existing systems (payroll) having to consider anything.
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treeman79 1199 days ago
It’s a government take over of the private sector.

Government official picking losers and winners. Winners will mostly be those who supported government officials party.

Either using money from tax payers. Or creating new money out of thin air. Leading to yet more punishing inflation.

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