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Comment by fnordpiglet | Hacker News Reader

Yes. It’s called clawback provisions. They were summarily fired and their compensation was clawed back.

And how are the losses being socialized? The assets of the bank are collateralizing the lines of credit they’re getting to stay solvent. It won’t cost anyone a thin penny, other than bank management and shareholders.

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The FDIC is guaranteeing all SVB deposits, including deposits above $250k. Any deficit will be paid from the FDIC's insurance fund, which if necessary will be topped up by a special assessment on all participating banks. So the losses (if any) won't be socialized over taxpayers, but they will be socialized over some combination of bank owners and customers.

https://www.federalreserve.gov/newsevents/pressreleases/mone...

> So the losses (if any) won’t be socialized over taxpayers,

I mean, a “special assessment” is just a different word for a one-time tax, and it being directly on all banks and indirectly on everyone who banks, or does business with entities who bank, makes distinguishing the payers of this tax and “taxpayers” ludicrous hair-splitting.

Exactly, the banks that practiced sound risk management get to subsidize the banks that didn’t. Textbook moral hazard.

I imagine taxpayers did pay at least something in the form of treasury and fed employees working over the weekend and getting paid overtime. Or is that not how it works?

Are police wages “socializing the cost of crime”? I consider enforcement necessary overhead.

I'd say they are. And I agree with you that it's necessary overhead. The action is what "cost the taxpayers money" because it required enforcement action. Crime is actually a great example: we all pay when crimes are committed, so we should all take interest in preventing crime rather than just reacting whenever it happens. The same is true for things like rail freight safety, air travel safety, and banking.

Do you have a link that supports your assertion that all of the proceeds from stock sales by SVB execs while they were mismanaging risk in 2022-23 are being clawed back?

it will directly cost all of us, except those who have no bank account. its unsustainable and wrong.

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