All Silicon Valley bank deposits are guaranteed 100%. Any losses will be shared and taken from the entire US banking industry.
The government is creating a fund at the discount window. A bank can give the Fed $X billion of bonds or mortgages. The fed gives them cash. This ensures that the bank does not have to sell bonds or mortgages at a loss. The low interest rates won’t matter to the fed.
The Fed will recover losses and could increase FDIC charges to banks.
This process is somewhat like what has been set up in the insurance industry. The insurance industry pays into funds managed at the state level to make sure all claims get paid.
Brian Wang is a Futurist Thought Leader and a popular Science blogger with 1 million readers per month. His blog Nextbigfuture.com is ranked #1 Science News Blog. It covers many disruptive technology and trends including Space, Robotics, Artificial Intelligence, Medicine, Anti-aging Biotechnology, and Nanotechnology.
Known for identifying cutting edge technologies, he is currently a Co-Founder of a startup and fundraiser for high potential early-stage companies. He is the Head of Research for Allocations for deep technology investments and an Angel Investor at Space Angels.
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