SIVB stock collapsed and all the investors into SIVB were wiped out. US Government stepped in and started allocating the remaining assets, prioritizing the customers and hurting the bondholders and shareholders.
IE: The shareholders / bondholders of SIVB were basically wiped out. The losses were privatized so to speak, isolated to the investor class.
Sure, you can quibble somewhat -- investor losses are not socialized. However, the FDIC insurance fund that makes depositors whole is ultimately funded by taxpayers.
> However, the FDIC insurance fund that makes depositors whole is ultimately funded by taxpayers.
FDIC funds don't come from taxpayers. *Banks* pay FDIC insurance fees.
Now you can quibble if FDIC is paid by banks, or if you think the "costs are passed onto the customers". But bank-customers are not necessarily "tax payers". At very least, the vast majority of my cash is in VMFXX and SWVXX, so I personally have very little money in Checking/Savings (so I barely pay any kind of "banking insurance" fees in practice, just enough to keep my checking account open).
The little banking insurance that my money is going towards is my Checking account / Savings Account at a local Credit Union as well. Which is NCUA (not FDIC), so a totally different insurance program.
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So none of my personal wealth is actually tied to FDIC in any way, despite myself paying plenty of taxes all the time. I'm simply not a bank customer, so there's no way I personally am related to any FDIC related situation.
SIVB stock collapsed and all the investors into SIVB were wiped out. US Government stepped in and started allocating the remaining assets, prioritizing the customers and hurting the bondholders and shareholders.
IE: The shareholders / bondholders of SIVB were basically wiped out. The losses were privatized so to speak, isolated to the investor class.