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0 pointscalpaterson3y ago0 comments

The FDIC isn't funded from general taxation, it's funded by a specific levy on banks.

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If it were to ever run out, though, it's generally assumed taxpayers would make up the rest.

No, the bank could be allowed to collapse or the Fed could arrange a meeting (LTCM style) and basically force a buyout. Nothing is assumed.

The FDIC is explicitly backed by the full faith and credit of the US government (and thus taxpayers).

In the extremely unlikely case that the fdic insurance fund couldn’t make insured deposits while the tax payer is on the hook.

That's unrelated. The FDIC isn't gonna renege on the $250k protection, even if they run out of money. The US government will step in.

The bank's continued existence isn't the FDIC's concern. Making the depositors whole is.

j / k navigate · click thread line to collapse

If it were to ever run out, though, it's generally assumed taxpayers would make up the rest.

No, the bank could be allowed to collapse or the Fed could arrange a meeting (LTCM style) and basically force a buyout. Nothing is assumed.

The FDIC is explicitly backed by the full faith and credit of the US government (and thus taxpayers).

In the extremely unlikely case that the fdic insurance fund couldn’t make insured deposits while the tax payer is on the hook.

That's unrelated. The FDIC isn't gonna renege on the $250k protection, even if they run out of money. The US government will step in.

The bank's continued existence isn't the FDIC's concern. Making the depositors whole is.

j / k navigate · click thread line to collapse