Both you, op and others are being ignorant on this. Insurance payment or bailout is external money, this is making depositors whole using the bank's assets, not FDIC or government money. Tax payers are not making anyone whole as I understand yellen's proposal.
Nope. YC and other investors are explicitly asking for something beyond the normal process - no possible haircuts, no delays, $10M guaranteed, whatever. That can't be covered just by SVB assets. (It can be mostly covered. But that's not what they're begging for.)
And that's without getting into the question of whether they should be allowed to still reap the rewards of being a customer of a risk-taking bank for years before the event.
The solvency gap is minuscule and there are known buyers lining up. They will pay a premium to acquire the business of 40k companies (and whatever is left of the brand) and that capital (along with the assets) is ensuring creditors are made whole while shareholders get wiped. There is no bailout; people just seem to project 2007 onto a completely different situation.
Yes, the way I read this request (and Yelen’s response) the government’s “commitment” is meant to provide a floor for private offers so as to immediately address concerns, not as a primary path forward.
Please keep this subthread's context in mind - it starts with
> The only thing anyone is asking for...
And my comment is about what those people are asking for. They're claiming they're not asking for a bailout, while asking for a bailout. They are confused, or lying, or both.
When the government has to step in and use money to back things up, that’s a bailout. “Making depositors whole” can only be accomplished if the assets owned by SVB are bought for more than their market value, where the government is on the hook for the delta. That’s a bailout.
