When WaMu was seized by the FDIC, it’s holding company, WMI, filed for bankruptcy: https://www.fdic.gov/resources/resolutions/bank-failures/failed-bank-list/wamu-settlement.html. In the same way, I could see SVB Financial Group, SVB’s holding company, filing.

Resolving N/A due to ambiguity of the term "bankruptcy":

• As @Radicalia points out, US banks can't file for bankruptcy due to regulation. The bankruptcy-equivalent thing they can do is come under the receivership of the FDIC (which is what happened).

• According to the colloquial meaning of "bankruptcy" then, this market should resolve YES; under the technical, legal meaning, it should resolve NO. Neither option is satisfactory; so I'm resolving N/A.

Not clear that banks can "file for bankruptcy" under US law: https://scholarlycommons.law.wlu.edu/cgi/viewcontent.cgi?article=1023

Sorry, fixed link: https://scholarlycommons.law.wlu.edu/cgi/viewcontent.cgi?article=1023&context=wlulr

@Radicalia Hmm, I'm thinking about N/A-ing this market. Neither a YES nor NO resolution would seem fair given that the presuppostion that banks can file for bankruptcy is false. I'll wait until the end of the day to resolve in case any of you have a compelling case to make otherwise.

@Radicalia nope, they can't. This market will resolve to NO. The feds already took control of the bank.

@MP I was watching Bloomberg and they said the bank failed.

@SG I mean if they can't do it then the answer to whether they did clearly seems like "NO". YES holders probably should have researched whether it was possible?

@Radicalia If they can't do it, there is no point to the market. (And the bankruptcy-equivalent action is being taken into FDIC receivership, which did happen.)

@Radicalia I bet on it with the 'spirit of the question' in mind- would the bank fail and go into whatever analogous bankruptcy proceedings banks do

I agree with N/A or YES. Resolving it NO reinforces a, imo, stupid norm that I'd say is likely to drive a lot of newbs away from using prediction markets

@ian I think spirit of the question is good when there's ambiguity, but there's no ambiguity here as far as I can tell. I'm a lawyer though so I think it's pretty reasonable to use legal definitions of legal constructs. :-)

@Radicalia @SG clearly had no idea banks couldn't go into bankruptcy, so he meant something else. He didn't intend to trap ignorant traders.

@ian Comm'on Ian. A N/A is completely reasonable here, but an YES?! The bank isn't bankrupt, anyone in the press is calling it that way. I don't think what the creator had in mind when she created the market is a good measure of what counts and what doesn't count. There's no way for traders to tell what the creator had in mind and besides, a market just like this but created by @Radicalia would have another resolution, because what he had in mind was another thing? Comm'on!

@MP *no one in the press

@ian I'm not accusing anyone of trying to trap innocent traders. People trade at their own risk. If the premise of a question is false, then part of the appeal of prediction markets, it seems to me, is to surface that by allowing people to profit off of discovering false premises! Seems to me like a very bad incentive system to implicitly disincentivize people who surface bad presumptions.

@ian I also question whether the FDIC structure is really "analogous" to bankruptcy. I don't know either area of law really well but it could very well have key differences and disanalogies. I don't think it's been shown to me that FDIC receivership is bankruptcy by another name.

@ian Imagine a scenario in which someone made a "Will Jennifer Granholm be President by 20XX" market, and it was trading at 30%, then I pointed out that she is constitutionally ineligible as being born in Canada. Would it make sense to NA that market because the market creator failed to account for the fact that it was impossible under current law? Why would this be any different?

A possible response is that theoretically there could be a constitutional amendment that makes Granholm eligible for the Presidency. But as in the Granholm case, Congress could THEORETICALLY pass a law that allows SVB into bankruptcy by 4/1. We're betting on whether they can do so.

It seems pretty bad for markets to be resolved contrary to the plain meaning of their title and any explicit terms. I'll definitely be less likely to trade on @SG's markets if they don't resolve in accordance with plain meaning where one unambiguously exists.

(NAing does seem reasonable to me though I maintain that "NO" is correct)

@Radicalia A good test whether the two are interchangeable is to check if a mainstream media outlet is reporting the failure using the word bankruptcy. I couldn't find

@Radicalia Resolving YES would be in line with the plain meaning of "bankrupt" as "financially ruined; impoverished" (https://www.thefreedictionary.com/bankrupt). This is how the term is used colloquially and would be a fair, albeit legally incorrect, way to describe what happened. Given the ambiguity, I'm more convinced resolving N/A is the only defensible option.

FDIC’s press release today about their takeover of SVB sounds a lot like bankruptcy, without invoking “bankruptcy.” Interested to see how this one resolves. https://www.fdic.gov/news/press-releases/2023/pr23016.html

Dupe of

@Yoav My bad, this is wrong.