I'm not quite sure of that interpretation of the text. Here's the quote:
> We are also announcing a similar systemic risk exception for Signature Bank, New York, New York, which was closed today by its state chartering authority. All depositors of this institution will be made whole. As with the resolution of Silicon Valley Bank, no losses will be borne by the taxpayer.
To me, that last sentence about SVB is distinct and separate and not implying that the previous sentence about Signature depositors applies to SVB. But you could be right as well, I don't think it's clear.
The "also announcing a similar" bit is a subtle hint that one may also want to read the previous paragraph :-)
"After receiving a recommendation from the boards of the FDIC and the Federal Reserve, and consulting with the President, Secretary Yellen approved actions enabling the FDIC to complete its resolution of Silicon Valley Bank, Santa Clara, California, in a manner that fully protects all depositors. Depositors will have access to all of their money starting Monday, March 13. No losses associated with the resolution of Silicon Valley Bank will be borne by the taxpayer."
It’s pretty astonishing reading the comments in this thread just how many people have not read this press release. It’s not even a complicated message!
i thought it was an unnecessarily ambiguous way to phrase it; 'fully protects all depositors' and 'will have access to all of their money' doesn't explicitly say that they won't take a haircut; after all, after a haircut, you still have access to all of your money, it's just that 'all of your money' is less than it was before
it relies on the following paragraph to be explicit that all depositors will be made whole and will not lose any money
Oddly, that's whats happening on Twitter too: the haute couture space ppl ran to start a space and frame it as "the contagion beginning"
I find this to be an odd moment in internet history, a lot of its senior elders seem to have forgotten the odd effects it has on discourse and are unintentionally leaning into it
Signature Bank going under is proof that contagion was indeed happening, contra what some people (e.g. Paul Krugman) were saying.
This decisive action by the government (both ensuring depositors will be made whole immediately, and the Federal Reserve giving out extra liquidity) should ensure that the contagion doesn't spread any further though, an banks like First Republic will avoid going under as well.
