> and certainly not an assumption that is safe to rely on.
What scenario can you imagine where this does not hold true?
SVB is almost the perfect scenario in which to haircut depositors, and yet here we are.
What scenario can you imagine where this does not hold true?
SVB is almost the perfect scenario in which to haircut depositors, and yet here we are.
You can see dividend payouts from failed banks here: https://closedbanks.fdic.gov/dividends/
There are many examples of cases in which depositors take a 4-10% haircut, and receive it months or years after the failure (meaning the haircut is quite a bit larger when factoring for time).
Was always wondering if they got more, but nope.
(They did get lucky in that fdic limit was $100k and I think they retroactively upped it to $250k on this failure, but that probably hurt rather than helped anyone with over $500k or so).
Many other examples of >10% losses, would be cool if someone did an analysis.