SVB bailout: the poor will once again save the rich

Here is a short insight that once again shows the commonly known fact that privatization of profits and socialisation of losses is a common practice on America.

The FDIC typically does what it can to get depositors’ money back when a bank fails, but the timeline can vary. Only depositors with $250,000 or less in the bank are guaranteed that all their funds would be close to immediately available — that is, a bank can fail Friday, and an insured person can get everything deposited back by the following Monday.

For the uninsured, in normal bank resolutions, depositors get what remaining is available as the FDIC sells the assets of the failed bank. Typically, the FDIC tries to find another bank that will swallow up the assets and make all depositors whole, but sometimes the FDIC is forced to sell what assets it can and give the money to depositors as it comes in.

The announcement Sunday seemed to indicate that the FDIC was unable to find a buyer for SVB’s banking business and instead had to resort to an extraordinary process only reserved for times when there’s a systemic risk to the economy.

But the uninsured depositors will be made whole on Monday.

The poor will once again subsidize the rich in this "socialism for the rich / capitalism for the poor system".