Quote from: JoelKatz on November 07, 2012, 12:39:58 AM

The FDIC is specifically insurance and specifically assumes the risk of bank failures.

Patrick specifically insured his deposits and specifically assumed the risk of loan failures.

Quote from: JoelKatz on November 07, 2012, 12:39:58 AM

In addition, there was no mistake on the part of the people whose funds the FDIC insured. So it would not have been equitable for the FDIC to split the losses with those it insures.

If the FDIC were named Patrick, you would probably say the depositors made the assumption that the banks loans weren't correlated, and thus should share in the losses. You would probably say that regardless of whether the depositors actually made that assumption.

Quote from: JoelKatz on November 07, 2012, 12:39:58 AM

It's possible he had different loans with different terms and some weren't predicated on the shared belief that he had limited Pirate exposure. You'd have to look on a case by case basis and decide in each case how to equitably divide the losses.)

Agreed. My deposit wasn't predicated on shared beliefs of what he would do with his loans, it was predicated on the shared belief that he guaranteed his deposits. He didn't specify exactly what he was going to do with the deposits, or who he was going to loan money to, so we couldn't have had shared beliefs on correlation which is irrelevant anyway. If he spent the money on hookers and blow, I would still expect him to honor the shared belief that he guaranteed his deposits.

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