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Matthew Yglesias @mattyglesias

I think a lot of the tech community has misconstrued what makes this situation difficult. Normally failed banks get resolved with no losses to depositors (insured or otherwise) and no government bailout because the FDIC sells the bank to some other more solvent bank. — PolitiTweet.org

i believe that if Silicon Valley Bank were instead called Farmers Bank Of Santa Clara (they bank a lot of winegrowe… https://t.co/MaoJdFd49L

Posted March 12, 2023

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Matthew Yglesias @mattyglesias

Rising interest rates depress bond prices impairing bank balance sheets leading to bank failures leading to flight to quality leading to lower interest rates which raise bond prices and improve bank balance sheets. The circle of life. — PolitiTweet.org

Posted March 12, 2023

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Matthew Yglesias @mattyglesias

The reason this works is that most banks are small so the set of possible buyers is large and someone usually turns out to be ambitious enough to go for it. When rural banks fail that’s what happens there’s no big controversy. — PolitiTweet.org

Posted March 12, 2023