New Fed/FDIC Fund (Patreon)

Looks like The Fed realizes the problem of financial contagion and further bank runs. They are considering creating a fund to backstop depositors to make sure the whole system doesn’t collapse for the banks face the same issue that Silicon Valley Bank did of having long dated bonds and technically not being able to cover depositors. Aka Bail Out - thanks money printer.

The Federal Deposit Insurance Corp. and the Federal Reserve are weighing creating a fund that would allow regulators to backstop more deposits at banks that run into trouble following Silicon Valley Bank’s collapse.

Regulators discussed the new special vehicle in conversations with banking executives, according to people familiar with the matter. The hope is that setting up such a vehicle would reassure depositors and help contain any panic, said the people. They asked not to be identified because the talks weren’t public.

Read more: FDIC Races to Return Some Uninsured SVB Deposits Monday

A representative for the Federal Reserve declined to comment. Representatives at the FDIC didn’t immediately respond to a request for comment

https://www.bloomberg.com/news/articles/2023-03-12/us-discusses-fund-to-backstop-deposits-if-more-banks-fail