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Comment by Finnucane | Hacker News Reader

Though the WAMU failure in 2008 nearly broke the FDIC. You know the cartoon of the snake eating the elephant? It was like that.

Samll banks, on the other hand, fail every week and the FDIC cleans them up so fast no one even notices.

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So basically a massive worst case financial crisis led to something almost, but not actually, failing.

Sounds like the system worked extremely well.

I feel the same about the Trump presidency. He and his cohorts attempted to subvert the system, pen testers if you will, but the system responded and survived. In the end, we should thank Trump for helping to improve the American system of rule of law and governance.

The jury is out for a while on whether the result was "survived" or "gave a better playbook for next time". Those on the left would tend to argue the lack of consequences thus far encourages a more competent attempt.

I'm confident that the people in the system have woken up to the fact that a large scale attack can come from within the system, which was previously unthinkable, and adjustments will be made to help prevent it from occurring again.

I really wish I saw what you saw. Instead, I see utter complacency.

The WAMU failure also serves as a pretty good example of the other levers available in traditional banking regulation (and the pressure on the government to find a fix) that Coinbase is unlikely to be able to avail themselves of.

The WAMU bankruptcy was difficult for the FDIC to manage, and there was no ready buyer to take the remains. But if there had been no FDIC to manage it, the result would have been catastrophic failure. Like Lehman, but with more retail banking customers getting wiped out.

Congress would have given the FDIC a blank check if they needed.

> Congress would have given the FDIC a blank check if they needed

Congress already did this. The FDIC reserve fund is mostly an accounting and accountability thing. The act creating the FDIC gives it the explicit backing of the United States’ “full faith and credit.”

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