- Rest assured.
Relax knowing that your funds are eligible for multi-million-dollar FDIC insurance, protection that’s backed by the full faith and credit of the United States government.
- How it works
When you submit funds for placement through your bank using ICS or CDARS, that deposit is divided into amounts under the standard FDIC insurance maximum of $250,000 and placed in deposit accounts at other network banks.
Guess their business model is fucked since all deposits everywhere are now de facto FDIC insured. Why not chase 10% returns if you’re a bank? There’s no downside anymore. Edit: Obviously I'm being hyperbolic. I get that having your equity wiped out and your bondholders left holding the bag doesn't qualify as "no downside". I'm just salty about this whole thing. Wish me luck in not becoming a J6 Truther.
Bankers should be able to pursue risky strategies. Their customers should share in the risks, rather than disadvantaging more conservative banks by socializing losses (not with funds from "taxpayers," we are assured, but from anyone who happens to have a bank account).
I think there’s very little chance that a sophisticated depositor let alone an average depositor can accurately judge a bank’s risk profile. However when someone is paying a point higher than everyone else, it maybe makes sense to ask some tough questions.
Right, “There’s no such thing as a free lunch” gets you most of the way there. Depositors can’t easily judge how well regulators regulate either.
Supposedly the lesson of 2007-09 was that risk is everywhere and low risk events are correlated. I guess the lesson of 2020-22 was that when in doubt, print money. I would love to see a federal judge step in here and block FDIC's move on the grounds that only Congress can appropriate funds. I fucking hate Trump and DeSantis, but Sleepy Joe is inching ever closer to losing my vote. Maybe I'll write you in.