by mainemike52 on Jan 23, 2012
Banks fail.
Typically, when a bank fails the depositors stand to lose all their deposits. This was fixed in the US by better banking regulation and the FDIC.
But please be aware that financial regulation is now for all practical purposes NON-EXISTENT if you are a major bank.
The FDIC is an insurance company. Insurance companies can fail too. In fact, the FDIC could easily find itself swamped with just a few big bank failures.
Then what?
Theoretically, Congress would appropriate more funds to cover the shortfall.
But what if the failure is systemic and swamps the ability of the Treasury to cover the losses?
In that case, we go back to the way it has been since the beginning of time: when the bank fails, the depositors eat it.
New dollars? New Euros? I don't think so, but that's always possible.
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Typically, when a bank fails the depositors stand to lose all their deposits. This was fixed in the US by better banking regulation and the FDIC.
But please be aware that financial regulation is now for all practical purposes NON-EXISTENT if you are a major bank.
The FDIC is an insurance company. Insurance companies can fail too. In fact, the FDIC could easily find itself swamped with just a few big bank failures.
Then what?
Theoretically, Congress would appropriate more funds to cover the shortfall.
But what if the failure is systemic and swamps the ability of the Treasury to cover the losses?
In that case, we go back to the way it has been since the beginning of time: when the bank fails, the depositors eat it.
New dollars? New Euros? I don't think so, but that's always possible.
-FAIR USE-
"Copyright Disclaimer Under Section 107 of the Copyright Act 1976, allowance is made for "fair use" for purposes such as criticism, comment, news reporting, teaching, scholarship, and research. Fair use is a use permitted by copyright statute that might otherwise be infringing. Non-profit, educational or personal use tips the balance in favor of fair use." PROMO ONLY, Nonprofit, No Copyright Infringement Intended, All Copyrights Belongs to the Owner.PROMO ONLY, Nonprofit, No Copyright Infringement Intended, All Copyrights Belongs to the Owner.NOTE: These video's may be reproduced for non-profit, educational purposes ONLY.
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