Later yesterday morning, before major international markets opened for the week, the US authorities announced two steps in response to the failure of SVB Bank
- first, depositors not covered by the FDIC (amounts in excess of US$250000) would in fact be completely covered, with the costs to be covered by levies (taxes) on other US banks,
- second, a new Fed lending facility was set up, backed by the US Treasury, under which banks could borrow at market rate against securities that for these purposes would be valued at face value not market value. For most longer-term securities issued in the last decade, market value is currently less than face value.
Legislative changes after 2008/09 were supposed to make bailouts much harder and less likely, but at the first real test – in respect of one failed bank that was 16th largest in the US (and another a bit smaller still)…
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Utopia, you are standing in it! 
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