Should "Too Big to Fail" be "Too big to exist" regarding banks and other companies?

[Contrarian]

There is a case (different type) now, however, that reminded me of AIG, for those who are familiar with the 2008 crisis.  I think it was about $85 billion that they got. 

The question for today is: 

• Should "Too Big to Fail" be "Too big to exist" regarding banks and other companies?

Edited March 11 by Contrarian
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[Aristides]

Seems Silicon Valley Bank wasn't too big to fail.

[Contrarian]

17 hours ago, Aristides said:

Seems Silicon Valley Bank wasn't too big to fail.

Also seems they got bonuses right before the government takeover. 

Silicon Valley Bank employees received bonuses hours before the government takeover.

https://www.cnbc.com/2023/03/11/silicon-valley-bank-employees-received-bonuses-hours-before-takeover.html

[Michael Hardner]

12 minutes ago, Contrarian said:

Also seems they got bonuses right before the government takeover. 
 

I mean, sure.  I am sure that they had the right and the power.  And that's the last day cheque that they're going to see for a long time.

[sharkman]

Apparently the bonds that SVB was holding became an issue. The government interest rate increases is causing bond values to drop substantially.  

[Contrarian]

Trending ↑ 

Canadian banks erase $19.7 billion in value on SVB contagion

The fallout from Silicon Valley Bank’s collapse has led to a continent-wide selloff in financial stocks erasing $19.7 billion in value from Canada’s top banks in the last four days.

Some of the nation’s biggest banks, including Bank of Nova Scotia, Bank of Montreal and Toronto-Dominion Bank fell more than 2 per cent. With banking equities far and away the largest sector by weighting of the S&P/Toronto Stock Exchange Composite Index, Canada’s main stock benchmark slumped more than the S&P 500 as the biggest U.S. bank failure in more than a decade roils the market.

https://www.bnnbloomberg.ca/canadian-banks-erase-19-7-billion-in-value-on-svb-contagion-1.1893950

Edited March 12 by Contrarian
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[sharkman]

This is starting to look like a crisis.  And the government’s favourite go-to move is to take advantage of a crisis to cram something through that people wouldn’t accept under normal conditions.

Never let a crisis go to waste.

[Contrarian]

Trending (=)

President Biden said that no taxpayer money would be used to bail out Silicon Valley Bank as U.S. authorities tried to contain the damage from its collapse.

After the collapse of Silicon Valley Bank, despite U.S. assurances deposits were safe, banking shares slumped at market opening.

via New York Times & NPR

[sharkman]

1 hour ago, Contrarian said:

Trending (=)

President Biden said that no taxpayer money would be used to bail out Silicon Valley Bank as U.S. authorities tried to contain the damage from its collapse.

After the collapse of Silicon Valley Bank, despite U.S. assurances deposits were safe, banking shares slumped at market opening.

via New York Times & NPR

All government money is taxpayer money, as far as I can tell.  

[Rebound]

1 hour ago, sharkman said:

All government money is taxpayer money, as far as I can tell.  

In the sense that taxpayers are the owners of the government, yes. 
In the sense that banks pay into the FDIC and it fdic funds and not tax revenue funds which pay for depositor losses, no.  

[sharkman]

That FDIC fund only has 125 billion in it.  They will burn through that pretty fast.  And then what?  

[Contrarian]

⬆️ Trending via CNBC

JPMorgan takes over First Republic after it's seized by Californian financial regulator.

https://www.cnbc.com/2023/05/01/first-republic-bank-failure.html