Matthew Yglesias

Matthew Yglesias @mattyglesias

Joe Manchin is a process-truster https://t.co/Z7nKRriOJ8 — PolitiTweet.org

Matthew Yglesias @mattyglesias

@dsquareddigest Guess what? https://t.co/CAevBBCuLN — PolitiTweet.org

Matthew Yglesias @mattyglesias

Maybe as a result of this someone will found a bank with a disruptive business model of unlimited risk-free bank accounts where instead of paying interest they just hold the money and charge you a fee. — PolitiTweet.org

Matthew Yglesias @mattyglesias

@mchowla @EpsilonTheory I agree that those are two options but doing (1) doesn’t require retroactive guarantees to SVB depositors, it requires *prospective* guarantees to depositors at other banks paired with higher insurance fees and stricter regulations. — PolitiTweet.org

Matthew Yglesias @mattyglesias

RT @JonahCrane: For everybody super concerned about the knock-on effects of not protecting the uninsured deposits at SVB, the most importan… — PolitiTweet.org

Matthew Yglesias @mattyglesias

@Wertwhile I think the potential scandal is giving *personal* loans to founders with no liquid net worth on favorable terms in exchange for securing the companies’ banking business. — PolitiTweet.org

Matthew Yglesias @mattyglesias

RT @MattZeitlin: when the FDIC hiked its assessment rate for the deposit insurance fund last year, bank trade groups opposed it, saying tha… — PolitiTweet.org

Matthew Yglesias @mattyglesias

This image is a pretty good litmus test for politics: Do you view these earnest bureaucrats with respect or disgust? https://t.co/6yWLzhyiw1 — PolitiTweet.org

Matthew Yglesias @mattyglesias

Trust the process https://t.co/J7oBb81aiy — PolitiTweet.org

Matthew Yglesias @mattyglesias

If you think the possibility of uninsured depositors losing some money is unleashing financial chaos just wait until you find out House Republicans’ plan for the debt ceiling. — PolitiTweet.org

Matthew Yglesias @mattyglesias

@jasonfurman Is it actually obvious that rescuing Lehman creditors would have led to a dramatically better outcome? — PolitiTweet.org

Matthew Yglesias @mattyglesias

DeSantis is desperate to talk about anything other than his record on federal policy issues, he voted for the laxer rules on SVB that have left depositors facing possible losses. And he also voted for much more extreme bank bills that thankfully didn’t pass. — PolitiTweet.org

Matthew Yglesias @mattyglesias

We are also in a different situation macroeconomically. The Fed is trying to reduce spending to slow inflation not increase it to prop up demand, so “err on the side of doing more” logic that applied in 2007-2008 doesn’t apply today. — PolitiTweet.org

Matthew Yglesias @mattyglesias

In other words “if you don’t guarantee 100 percent recovery of all uninsured deposits at SVB then every depositor will flee every other bank for a GSIB where there money will be safe” is certainly a *convenient* argument for SVB depositors but it involves multiple leaps of logic. — PolitiTweet.org

Matthew Yglesias @mattyglesias

Should also say: While GSIBs are held to higher regulatory standards that should reduce the odds of a haircut in the event that Orderly Liquidation Authority is invoked, there is no statutory or regulatory guarantee against uninsured depositors taking haircuts that I know of. — PolitiTweet.org

Matthew Yglesias @mattyglesias

If the concern is about deposits at other banks, you need to insure *those* deposits and then expand the regulatory umbrella and insurance fees in a concurrent way. — PolitiTweet.org

Matthew Yglesias @mattyglesias

I guess I’ll just keep saying this but rescuing SVB’s uninsured depositors is neither necessary nor sufficient to expand deposit insurance on a forward-looking basis. — PolitiTweet.org

Matthew Yglesias @mattyglesias

RT @DKThomp: “Whatever I don’t like is woke” is an illustrious genre, millions and millions of volumes deep. But nobody is going to beat… — PolitiTweet.org

Matthew Yglesias @mattyglesias

@conorsen 💯 — PolitiTweet.org

Matthew Yglesias @mattyglesias

Deposit insurance is good, it exists, and it continues to exist. Expanding deposit insurance seems like a fine forward-looking idea to me. But why would you retroactively insure the uninsured deposits at a bank that’s already gone bust? — PolitiTweet.org

Matthew Yglesias @mattyglesias

@EpsilonTheory @felixsalmon I understand that temperatures are running high as people try to avoid losing any money due to their own errors of business judgment, but instead of making things up this is what I think about expanding deposit insurance. — PolitiTweet.org

Matthew Yglesias @mattyglesias

I’d be curious what the CEOs of PNC, Truist, Fifth Third, State Street, etc actually think about this but they’re not on Twitter mouthing off. 😂 — PolitiTweet.org

Matthew Yglesias @mattyglesias

It seems telling that the “we need to avoid any depositor haircuts to avoid a national bank panic” argument emerged only after a full day of arguing for zero haircut on a different, illegal and factually inaccurate basis. — PolitiTweet.org

Matthew Yglesias @mattyglesias

@MattZeitlin Relatedly, nothing is stopping large regional banks from voluntarily maintaining more capital and liquidity to reassure depositors — that would be the mechanism by which GSIB depositors avoid haircuts. — PolitiTweet.org

Matthew Yglesias @mattyglesias

For a while police detectives would semi-routinely hypnotize witnesses to “improve” their memory. https://t.co/zvonEyTI6H — PolitiTweet.org

Matthew Yglesias @mattyglesias

It’s not like the FDIC cap was unknown or something players in the industry had never thought of before. If regional banks wanted that kind of scrutiny they could have gotten it. If they want to call Patrick McHenry and Maxine waters today they could probably get it. — PolitiTweet.org

Matthew Yglesias @mattyglesias

@aduehren I think the relevant ambiguity here is Yellen is promising uninsured depositors will have access to their money, but what Sacks wants is 0% haircuts not access to 85% of his funds with the other 15% gone. — PolitiTweet.org

Matthew Yglesias @mattyglesias

I can’t read anyone’s mind. But try to be honest about how you would have reacted if two years ago congress expanded deposit insurance, raised fees, tightened regulations and in response SVB degraded its client services and blamed big government overreach. — PolitiTweet.org

Matthew Yglesias @mattyglesias

Expanding deposit insurance is a totally reasonable idea (large regional banks like SVB have historically been opposed because it would mean higher fees) but *retroactively* insuring uninsured deposits is definitely a bailout. — PolitiTweet.org

Matthew Yglesias @mattyglesias

It would be convenient for everyone if there turns out to be an eager mega-bank buyer for SVB. But if there’s not the whole premise of the legal framework congress wrote is that “auction the assets, pay depositors back whatever you can raise” will work fine. Will it? Maybe! — PolitiTweet.org