Comment by morpheuskafka
18 hours ago
But didn't it technically not even apply at the end of the day for SVB? They sold the bank to another bank, which is what usually happens, and that other bank assumed all its deposits and liabilities. The FDIC didn't have to pay out any deposits and thus the limit didn't come into play.
No. They got the exemption. The insurance fund was hit both for insured and uninsured deposits. The fdic then issued a special assessment to cover it.
Do all of us paid for bad risk management of the svb customers and the moral hazard is real, just not the default.