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by riskneutral
1186 days ago
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How bank runs were historically handled in the US is that the depositors lost all of their money. Banks runs are a recurring problem that have a history going back hundreds of years. That's changing now though, the SVB depositors will be made whole by the government in order to avoid a wider banking crisis and what that means for everyone else is TBD but it looks like some form of insurance that's better than $250k. |
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Post FDIC, bank runs were historically handled by the FDIC either merging the bank with a solvent one, or taking it over. Depositors below a certain amount lost exactly $0, amounts above that were at risk. That amount was currently at $250,000.
What's new is that depositors above the threshold have been made whole.