Ep23 “When Banking Fails” with Amit Seru
All Else Equal: Making Better Decisions
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The Importance of Sleepy Depositors
Amitai Etzioni: The banking system is $24 trillion or used to be $24 trillion, I don't know what the value is now slightly over. And if you look at the equity in the aggregate banking system, it's like $2 trillion. Half of them are insured by FDIC, half of them are uninsured. So when do they wake up? He says Silicon Valley Bank had a bunch of uninsured depositors very high and 97% of their depositors were uninsured. Etzionis: If one woke up, they woke up the whole 97% and in three days, they had one third of their deposits just leave. No bank can survive that.
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