Post
Topic
Board Economics
Re: Spain confiscates 0.03% of all bank deposits.
by
cr1776
on 18/07/2014, 00:22:51 UTC
How long before this happens in the US?

I feel like we wouldn't let this happen as easily, there would be a public outrage. But then again, we let NSA happen. So maybe not.
I don't think this could happen in the US. The FDIC insures all bank deposits up to $250,000 per depositor per institution. The bank would have to fail first and after that it could only apply to deposits above the above limits.

Banks already pay the FDIC an insurance premium based on how much money is on deposit at their bank. 
I doubt that would make any difference.  As you pointed out, FDIC insurance pays out when banks fail.  I doubt it covers government theft. Wink  Besides, even if FDIC insurance would somehow cover it right now, I'm sure they'd find a loophole or change the laws so it won't.

In the US they'd just print 0.03% more dollars. Lot less likely to cause public uproar.
Not that I want the government to do that, but I'd greatly prefer that to messing with bank deposits.

Our government doesn't even have any money, so no, there is no bank insurance here lol.

The FDIC has 50 billion of equity, probably in the form of bank deposits. It's basically just babble that you like to hear.

The FDIC is also backed by the US government, which can borrow basically unlimited amounts at a zero risk premium. With the backing of the FDIC deposit holders in the US do not need to worry about loosing access to the money in their bank accounts up to deposit limits.

The risk premium would increase greatly in a major crisis.  Look at the US downgrade in 2011.  The risk premium would expand in a really bad situation, and the result would be that the government would have to print money to cover the insurance.  So, yes, you'd get your money back, but it would be money that is worth less than what you had in the bank.