Will all uninsured accounts be made whole by closing (Dec 31, 2025)? Resolves based on announcements from FDIC, SVB, or articles from reputable media sources.
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@Yoav Eh, there's always a chance that the asteroid hits the earth tonight and prevents this. What's the harm in waiting until tomorrow?
@fortenforge I think they mean they'll only close it, but not resolve until tomorrow. Personally I'm unclear of the point of closing prior to resolution - why not allow people to keep trading over those last few percentage points?
https://home.treasury.gov/news/press-releases/jy1337
After receiving a recommendation from the boards of the FDIC and the Federal Reserve, and consulting with the President, Secretary Yellen approved actions enabling the FDIC to complete its resolution of Silicon Valley Bank, Santa Clara, California, in a manner that fully protects all depositors. Depositors will have access to all of their money starting Monday, March 13.
Actually after reading some more, it seems that large banks that have failed have rarely suffered a loss on uninsured deposits: https://www.cato.org/commentary/fdic-invents-costly-solution-imaginary-problem#
@jack Interestingly, both of the large examples included a buyout from another bank.
Unfortunately, my understanding is that uninsured depositors will likely get most of their money back, but not all. And, the process for getting their money may take a long time (years) to fully wrap up (although it sounds like at least some of the money will be paid out quickly - "The FDIC will pay uninsured depositors an advance dividend within the next week"
@Yoav Can they still be bought? I don't really know how the process works after the FDIC has closed them down.
@jack I'm not sure. There is still a company there, even if the bank itself is in receivership. My understanding is also that they have more assets than deposits, but the assets (specifically MBS) are worth much less if they are sold right now because of interest rates.