HOLD ON THERE: Yellen says not ALL deposits at ALL banks are "insured"

(AP Photo/Charles Krupa)

Let’s back up here a goldarn minute.

“Made whole” was the phrase of the week on Monday.

In an extraordinary action to restore confidence in America’s banking system, the Biden administration on Sunday guaranteed that customers of the failed Silicon Valley Bank will have access to all their money starting Monday.

In a related action, the government shut down Signature Bank, a regional bank that was teetering on the brink of collapse in recent days. Signature’s customers will receive a similar deal, ensuring that even uninsured deposits will be returned to them Monday.


And wasn’t it just, like, three days ago that myself and quite a few people much smarter than me – including people who have things like “former Deputy Treasury Secretary” in their byline – thought that Biden, Yellen, and Co. had basically nationalized the deposit base of our banking system? I know we got that impression from somewhere.

“…What that really means is that they have guaranteed the entire deposit base of the U.S. financial system. The entire deposit base. Why? Because you can’t guarantee all the deposits at Silicon Valley Bank and then, the next day, say to the depositors, say, at First Republic, “Look, sorry. Yours aren’t guaranteed.” Of course, they are. And this is a breathtaking step, which effectively nationalizes or federalizes the deposit base of the U.S. financial system…”

Well, quit your grinnin’ and drop your linen – there’s been a rules change.


Apparently, the Biden administration has decided to pick winners and losers.

…“I’m concerned about the precedent of guaranteeing all deposits and the market expectation moving forward,” Sen. Mike Crapo, R-Idaho, the committee’s ranking member, said in his opening remarks.

Republican Sen. James Lankford of Oklahoma pressed Yellen about how widely the uninsured deposit backstops will apply across the banking industry.

Will the deposits in every community bank in Oklahoma, regardless of their size, be fully insured now?” asked Lankford. “Will they get the same treatment that SVB just got, or Signature Bank just got?

Yellen acknowledged they would not.


…Uninsured deposits, she said, would only be covered in the event that a “failure to protect uninsured depositors would create systemic risk and significant economic and financial consequences.”

Lankford said the impact of this standard would be that small banks would be less appealing to depositors with more than $250,000, the current FDIC insurance threshold.

“I’m concerned you’re … encouraging anyone who has a large deposit at a community bank to say, ‘we’re not going to make you whole, but if you go to one of our preferred banks, we will make you whole.’”

“That’s certainty not something that we’re encouraging,” Yellen replied.


The LIAR! That’s EXACTLY what they’re doing. They are going to drive larger depositors out of the smaller regional banks, straight to their corporate cohorts at J.P. Morgan, Chase, Citicorp – you name the big playah.

It sure won’t be the 1st National of Podunk or a shale bank in Midland, TX.

Holy CRAP, this is breathtaking. Old Joe MBNA Biden is greasing his roots.

And how very convenient both of these failed and bailed institutions are chock-full of Democratic MEGA bucks and glitterati accounts of the First World Order.

This is on par with the word on the street that there were political considerations at work rejecting one auction offer for the remnants of SVB on Sunday night.


…Perhaps investors don’t believe the Administration’s Sunday interventions solve the problems. The Federal Deposit Insurance Corp. says it couldn’t find a private buyer for SVB, though a source tells us Treasury and the Federal Reserve favored one. FDIC Chairman Martin Gruenberg nixed it owing to hostility to bank mergers.

If you have to ask someone if you’re “systemically important,” trust me – you’re not. Neither is your money nor any facet of your life to these people.

They rub our collective noses in their utter disdain for law, order, and decency every day and do so with impunity.

I am so over it.

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