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Reserve requirements (Read 163 times)
pg
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Re: Reserve requirements
Reply #15 - 03/18/23 at 16:05:35
 
I said cash or liquid assets and you stated you didn't say that.

do not have to have any cash or liquid assets

I did not say that................

'any' infers that none exists


How is the FDIC failing at its stated duties?  

Do I understand this correctly?  The new floor system created the funds that are in the ESF?  My concern is if someone had or an institution had more than $250K in the bank they would be out of luck without the intervention of someone other than the FDIC.

Best regards,
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« Last Edit: 03/18/23 at 17:52:48 by pg »  

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Eegore
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Re: Reserve requirements
Reply #16 - 03/18/23 at 17:59:09
 
"'any' infers that none exists"

 Ok.  Then the "on hand" part is what led me to believe cash at the bank location.  Money = cash. On hand = at the bank location.  So warehousing billions of dollars on-site.  Either way legal monetary policy, by my assessment, required the zero holdings rate.  Good or bad, that's how it is done now.


"Do I understand this correctly?  The new floor system created the funds that are in the ESF?  


 Ok so technically the ESF, which is managed by the Treasury, backs the Federal Reserve against losses.  At this point it's not needed since the floor system created the massive holdings at the FR at this time.  The ESF is not funded directly by reserve holdings, but by three other major contribution methods.



"My concern is if someone had or an institution had more than $250K in the bank they would be out of luck with the intervention of someone other than the FDIC."


 Do you mean they would be out of luck without the intervention of someone other than the FDIC?

 The FDIC insures up to $250k, this is their threshold and people or organizations that want more coverage have to take the necessary steps.  This has been the same for a long time, and this is what is being done with the SVB situation.  Business as usual with the FDIC coverage.
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justin_o_guy2
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Re: Reserve requirements
Reply #17 - 03/18/23 at 19:55:54
 
The federal Reserve should not exist.
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The people never give up their liberties but under some delusion.- Edmund Burke.
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Re: Reserve requirements
Reply #18 - 03/19/23 at 07:03:52
 
people or organizations that want more coverage have to take the necessary steps.

I am not familiar what the additional steps may be.


Best regards,
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Re: Reserve requirements
Reply #19 - 03/19/23 at 11:59:43
 
"I am not familiar what the additional steps may be."


 I'd say the 3 most common for the average human are:

 Open an account at another bank.

 Brokerage.

 Different/Additional ownership categories.

 There's even more but they are more complex.  I prefer separating accounts, and utilizing Intrafi.  

 In any case, no, people and businesses are not stuck with only $250,000 FDIC coverage unless they insist on banking at one location, with no other humans involved, and refuse all other alternative capital holding options.

 What stated duties is the FDIC failing at?
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Re: Reserve requirements
Reply #20 - 03/19/23 at 13:32:57
 
What stated duties is the FDIC failing at?

If they need bailed out by the ESF/Treasury they are unable to fulfill their obligations.


Open an account at another bank.

Brokerage.

Different/Additional ownership categories.


A carnival shell game doesn't inspire confidence...............


Best regards,

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Re: Reserve requirements
Reply #21 - 03/19/23 at 15:47:10
 
"If they need bailed out by the ESF/Treasury they are unable to fulfill their obligations."

 The FDIC is not being bailed out.  It is paying out the insurance amounts that it covers, not amounts it does not cover - you know, like literally all other insurance.  Unless you know of an insurance that pays more than it says it will.  I don't.

 The  FDIC is not a market protection, it will never prevent bank runs, it will only provide insurance to consumers - at the rate it says and not more, just the rate that is insured.  This is exactly what it is doing, and it is not being "bailed out" by any other agency or the taxpayer.  The customers account amounts - that were never covered in any way by the FDIC - are being funded by other banks, fees and adjustments.

 It's similar to having additional insurance like AFLAC.  You get covered a certain amount by your primary insurance - say up to $250k, and also you get supplemental additional payments from AFLAC.  This doesn't mean your primary insurance "isn't fulfilling it's obligations", it means your expenses exceeded the amount you insured yourself for.  Would AFLAC be "bailing out" your insurance if they paid over the amount your insurance ever said it would cover?


"A carnival shell game doesn't inspire confidence..............."

 That's too bad. Maybe start to gain legislative leverage on increasing the FDIC amount, lobby for some change.  I for one could care less since I am not going to keep hundreds of thousands of dollars in a savings account making almost no returns on it.
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