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mmooss parent
It's the opposite. Regulated banks do not blow up - that's the point of regulation, to prevent those disasters.

See my comment in this same subthread: https://www.hackerneue.com/item?id=43510850

dist-epoch
Regulated banks don't blow up because the gov bails them out every time.
kasey_junk
It is extremely rare for the us gov to bailout the _banks_. 2008 was an abnormality (and one that will be studied for a long time).

The normal procedure is that the blown up bank is sold to another bank and the _depositors_ are bailed out by deposit insurance.

There are ~4500 banks in the US and about 2 blow up a year https://www.fdic.gov/bank-failures/failed-bank-list

mmooss OP
Where do you get that information?
dist-epoch
https://www.businessinsider.com/why-silicon-valley-bank-cust...
mmooss OP
The article itself says:

Did the government bail out Silicon Valley Bank?

No. SVB was closed by regulators, and is now under the control of the FDIC. When a bank fails, this is the government agency that ensures depositors get access to their money. Shareholders will get wiped out, and management has been removed.

dist-epoch
FDIC has limits. They were not respected, everybody was made whole. $150 billion of uninsured money was bailed out by the government.

> So, the FDIC, the Fed and the Treasury Department decided to go big and guarantee all SVB's deposits, even the roughly $150 billion that was supposed to be uninsured.

> Shareholders were wiped out.

Sure, but all the depositors were bailed out, which is what bailing out a bank means.

2 More Comments →
sleepybrett
no, the blow up and then the american taxpayer foots the bill for picking up the pieces.
mmooss OP
Could you give some examples?
sleepybrett
An example of bank bailouts? jesus man, pay some attention: https://en.wikipedia.org/wiki/Emergency_Economic_Stabilizati...
mmooss OP
That was 2008, which was an extraordinary event - many say it was the worst economic crisis since the Great Depression. People are claiming bank bailouts are regular events - are there recent ones?

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