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0 pointsalex_young3y ago0 comments

The current limit is the result of such action in 2008: https://archive.fdic.gov/view/fdic/3388

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They went beyond it for several banks: To my knowledge, nobody lost money in the dozens of banks that the FDIC closed in the 2008 meltdown, despite several depositors being beyond the FDIC limits.

pyrale3y ago

Did they even have that power in 2008? I remember they issued a statement about how they could have avoided losses for creditors, had they properly liquidated Lehman Brothers [1].

[1]: https://www.fdic.gov/regulations/reform/lehman.html

jpmattia3y ago

> Did they even have that power in 2008?

I don't remember tbh, but IndyMac (in July 08) was before Lehman (in Sept) so I think the answer is yes.

SkyPuncher3y ago

My impression has always been the limit has been designed to accommodate a "worse case scenario" where many, many banks need to be saved.

If it's only a handful, it's in the gov't interest to ensure that businesses and people don't loose their savings.

TMWNN3y ago

Not true. IndyMac customers got 50 cents on the dollar, even with the retroactive raising of the FDIC insurance limit to $250K.

j / k navigate · click thread line to collapse

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jpmattia3y ago

They went beyond it for several banks: To my knowledge, nobody lost money in the dozens of banks that the FDIC closed in the 2008 meltdown, despite several depositors being beyond the FDIC limits.

pyrale3y ago

Did they even have that power in 2008? I remember they issued a statement about how they could have avoided losses for creditors, had they properly liquidated Lehman Brothers [1].

[1]: https://www.fdic.gov/regulations/reform/lehman.html

jpmattia3y ago

> Did they even have that power in 2008?

I don't remember tbh, but IndyMac (in July 08) was before Lehman (in Sept) so I think the answer is yes.

SkyPuncher3y ago

My impression has always been the limit has been designed to accommodate a "worse case scenario" where many, many banks need to be saved.

If it's only a handful, it's in the gov't interest to ensure that businesses and people don't loose their savings.

TMWNN3y ago

Not true. IndyMac customers got 50 cents on the dollar, even with the retroactive raising of the FDIC insurance limit to $250K.

j / k navigate · click thread line to collapse