Plain and simple, it was a bailout.
One sentence stands out in the last two days of banking hearings:
"𝙏𝙝𝙚 𝙩𝙚𝙣 𝙡𝙖𝙧𝙜𝙚𝙨𝙩 𝙙𝙚𝙥𝙤𝙨𝙞𝙩 𝙖𝙘𝙘𝙤𝙪𝙣𝙩𝙨 𝙖𝙩 𝙎𝙑𝘽 𝙝𝙚𝙡𝙙 $𝟭𝟯.𝟯 𝘽𝙞𝙡𝙡𝙞𝙤𝙣, 𝙞𝙣 𝙩𝙝𝙚 𝙖𝙜𝙜𝙧𝙚𝙜𝙖𝙩𝙚"
This sentence is in Martin Gruenberg FDIC Chairman's written testimony.
It screams bailout.
His testimony also revealed the estimated cost of SVB in total is $20 billion.
𝗦𝗮𝗶𝗱 𝗮𝗻𝗼𝘁𝗵𝗲𝗿 𝘄𝗮𝘆 𝟲𝟲% 𝗼𝗳 𝘁𝗵𝗲 𝗦𝗩𝗕 𝗕𝗮𝗶𝗹𝗼𝘂𝘁 𝘄𝗲𝗻𝘁 𝘁𝗼 𝘁𝗲𝗻 𝗱𝗲𝗽𝗼𝘀𝗶𝘁𝗼𝗿𝘀.
𝗧𝗲𝗻 𝗗𝗲𝗽𝗼𝘀𝗶𝘁𝗼𝗿𝘀.
𝗪𝗵𝗲𝗻 𝘄𝗶𝗹𝗹 𝘄𝗲 𝗸𝗻𝗼𝘄 𝘄𝗵𝗼?
Maybe it will be revealed in one of the many agency reports that will follow this debacle. It appears there are at least five in the works:
• Fed Report of SVB failure of Supervision
• FED Inspector General Review
• GAO Review of the FED
• FDIC Deposit Insurance Recommendations
• FDIC Review of its Supervision
I discuss this and more in today's episode of With Flying Colors, which you can find on any podcast app.
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