Liberal Forum

Skans » 14 Mar 2023, 7:46 am » wrote: ↑

14 Mar 2023, 7:46 am

I really have no objection to the FDIC.  It was a decent solution to a grave problem - bank runs and bank failures. In 2007-2008 I recall there being some bank failures, i.e. some that didn't get bailed out.  The FDIC did as they were commissioned to do, make sure depositors got paid. Of course, it took time and they didn't get any interest, but that's better than getting nothing.

Lehman Brothers was allowed to fail in the Great Recession as it is called by scholars. From my understanding SVB has been seized by regulators.

"During the Great Recession of 2008-09, several banks and financial institutions were allowed to fail or declared bankruptcy. Some of the notable ones include:

1. Lehman Brothers: It was the fourth-largest investment bank in the US before it filed for bankruptcy in September 2008.
2. Washington Mutual: It was the largest savings and loan association in the United States before it was seized by the Federal Deposit Insurance Corporation (FDIC) in September 2008.
3. IndyMac: It was one of the largest savings and loan associations in the US before it was seized by the FDIC in 2008.
4. Bear Stearns: It was a global investment bank and securities trading and brokerage firm that was acquired by JPMorgan Chase in March 2008.
5. Countrywide Financial: It was a mortgage lending company that was acquired by Bank of America in 2008.

These failures and bankruptcies were widely seen as a major factor in triggering the financial crisis that led to the Great Recession."