Jayson Lowe explains how the banking system depends on depositor trust. When two U.S. banks recently shut down, the government stepped in to protect depositors instead of letting the market work, effectively guaranteeing their funds.
March 13
Two banks
Nelson said something to us many years ago. He said that every dollar that you put on deposit with a conventional bank is based purely on trust. When you see this scenario that's played out with the conventional bank in the United States, and now there are two banks, so there's a second bank that's been essentially, lights have been turned out until the regulators figure out what they're going to do, and then you see what's happening. So today is March 13th. The stock market is responding primarily to regional banks that are taking a very, very big brow beating in the market. And so the government steps in and says, we are absolutely going to ensure that. Not the technical word, insure. We're going to make sure that all depositors are made whole. So the market, the actual market, doesn't have the opportunity to actually work as a market. When the government steps in and says everybody's going to be whole, obviously good for depositors, and there's a whole process and a system that they're able to make depositors whole. Not talking about fdic. I'm not talking about using.
