Revelations 18:9-11 “The kings of the earth who committed fornication and lived luxuriously with her will weep and lament for her, when they see the smoke of her burning, 10 standing at a distance for fear of her torment, saying, ‘Alas, alas, that great city Babylon, that mighty city! For in one hour your judgment has come.’ 11 “And the merchants of the earth will weep and mourn over her, for no one buys their merchandise anymore
- Janet Yellen Just Poured Lighter Fluid On Every Small Bank In America
- When a bailout was hastily arranged for uninsured depositors at Silicon Valley Bank and Signature Bank, the implication was that the same thing would be done for uninsured depositors at any other banks that failed. But now U.S. Treasury Secretary Janet Yellen is telling us that is not actually what will happen. She just admitted that depositors at a failed bank will only be protected if officials determine that a “failure to protect uninsured depositors would create systemic risk and significant economic and financial consequences”. So that means that depositors at big banks are likely to be protected and that depositors at small banks are much less likely to be protected. In other words, Janet Yellen just poured lighter fluid on every small bank in America.
- Why would anyone keep more than $250,000 in a small bank at this point when there is a very real risk of losing all of the uninsured money if the bank suddenly fails?
- Wealthy people are not stupid. They are going to move billions of dollars from small banks to large banks in the days ahead, and that is going to cause a tsunami of stress on those small banks.
- [Last] Friday, Senator James Lankford asked Yellen the sort of question that many of us have been hoping that someone would ask…
- Republican Sen. James Lankford of Oklahoma pressed Yellen about how widely the uninsured deposit backstops will apply across the banking industry.
- “Will the deposits in every community bank in Oklahoma, regardless of their size, be fully insured now?” asked Lankford. “Will they get the same treatment that SVB just got, or Signature Bank just got?”
- Yellen acknowledged they would not.
- Uninsured deposits, she said, would only be covered in the event that a “failure to protect uninsured depositors would create systemic risk and significant economic and financial consequences.”
- Needless to say, that means that wealthy individuals with very large balances at very small banks are at great risk.
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