Today’s links SVB’s investors will get $2b in public bailout money: Also, Silicon Valley is apparently a neighborhood in Manhattan? Hey look at this: Delights to delectate. This day in history: 2003, 2008, 2013, 2018, 2022 Colophon: Recent publications, upcoming/recent appearances, current writing projects, current reading SVB’s investors will get $2b in public bailout money (permalink) We were told that the Silicon Valley Bank bailout wasn’t a bailout: in a bailout, it’s the investors who get public money; but with SVB, it was the depositors. But, of course, the owners of SVB were also depositors in their own bank. All in all, SVB’s owners are entitled to $2B in public money. When Biden said, “investors in the banks will not be protected. They knowingly took a risk and when the risk didn’t pay off, investors lose their money. That’s how capitalism works,” he was ignoring the fact that this isn’t how the law works. Writing on Credit Slips, the incomparable Adam Levitin – the best source on bankruptcy law writing on the web today – breaks it down: “creditors of a subsidiary have no claim on the assets of a parent.” That means that the FDIC has no claim on the assets of the now-bankrupt holding company that owned SVB: https://www.creditslips.org/creditslips/2023/03/oops-how-the-fdic-guaranteed-the-deposits-of-svb-financial-group.html Which means that when the FDIC makes all the depositors at SVB whole, they will transfer $2b to the “investors” whom Biden promised “will not be protected.” If you’re interested in the minutiae of this, Levitin’s piece is short…Pluralistic: SVB's investors will get $2b in public bailout money (18 Mar 2023)