OPINION | After the collapse of Silicon Valley Bank, the federal government is still picking winners and losers, and making up rules as it goes along.
As back then, government bureaucrats justify their ad hoc actions by appealing to a higher purpose. They’re not bailing out investors, they’re protecting depositors. They’re not saving rich investors, they’re preventing a domino effect from hurting small business owners.While there is still some confusion over exactly what happened at SVB, several things are quite clear.
Prior to this weekend, any account beyond $250,000 was not covered by FDIC deposit insurance. Now, the federal government will cover the full amount over the limit. It makes no difference whether the money comes from the FDIC fund, the Exchange Stabilization Fund, the Treasury’s general fund, or the Federal Reserve.the taxpayers, so people will end up paying for this mess no matter what.
Finally, as in the wake of the 2008 crisis, federal officials are already talking about new regulations to prevent this from happening again. But we didn’t need new regulations then and we don’t need them now.
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