Regarding "socializing" I should point out that silicon valley bank had about 34 billion more assets than deposits at the time they were taken over by the FDIC. In percentage terms their assets were 119% of their deposits. So not only are they not in the red, there is a 19% cushion.
So I am not sure there even are losses to socialize. There is the uncertainty with marking to market instead of marking cost of purchase but even then I am not sure the assets will shrink to the point where anyone is losing money.
Furthermore, from everything I have read about it the assets of the safest type. They are either US treasuries or Fannie and Freddy issued mortgage backed securities. Even if marking to market would make these be worth less than they were initially purchased for, there is little doubt that they will be paid back in full if held to full term, and thus eventually make more money than they were purchased for. The problem is that it will take a while for that money to be paid back, while all the depositors want to withdraw their money now.
So I understand that people are still feeling anger from the 2008 bailout. But this is not the case here (as far as I know). There has been no excessive risk taking, there are no hidden losses. It is just the well known case that even the best and best run bank will fail if all their depositors decide to demand their money at the same time.
The FDIC should take over the assets and pay the depositors as soon as possible. If necessary, the FDIC should take a loan from the FED against the assets. And no, it does not seem that there will be any cost to the taxpayer.
It may help to call your congressman, to urge the FDIC to move fast and make people's money available quickly. It may also help to try to nudge your congressman to urge the FED to stop this interest raising cycle which is obviously affecting the health of the banking system.
So I am not sure there even are losses to socialize. There is the uncertainty with marking to market instead of marking cost of purchase but even then I am not sure the assets will shrink to the point where anyone is losing money.
Furthermore, from everything I have read about it the assets of the safest type. They are either US treasuries or Fannie and Freddy issued mortgage backed securities. Even if marking to market would make these be worth less than they were initially purchased for, there is little doubt that they will be paid back in full if held to full term, and thus eventually make more money than they were purchased for. The problem is that it will take a while for that money to be paid back, while all the depositors want to withdraw their money now.
So I understand that people are still feeling anger from the 2008 bailout. But this is not the case here (as far as I know). There has been no excessive risk taking, there are no hidden losses. It is just the well known case that even the best and best run bank will fail if all their depositors decide to demand their money at the same time.
The FDIC should take over the assets and pay the depositors as soon as possible. If necessary, the FDIC should take a loan from the FED against the assets. And no, it does not seem that there will be any cost to the taxpayer.
It may help to call your congressman, to urge the FDIC to move fast and make people's money available quickly. It may also help to try to nudge your congressman to urge the FED to stop this interest raising cycle which is obviously affecting the health of the banking system.