8/28/2023 0 Comments Flic insuranceThis limit was raised from $100,000 to $250,000 in 2008 in response to the financial crisis. It achieves this by providing insurance for deposits held at FDIC-insured banks, ensuring that if a bank fails, depositors will receive their insured deposits up to a limit of $250,000 per depositor, per insured bank, for each account ownership category. Its primary objective is to safeguard depositors and promote stability in the banking system. The FDIC was established in 1933 in response to the banking crisis during the Great Depression. However, it is crucial to note that while some private VC firms manage public funds from investors like pension funds or insurance companies, it is unfair to utilize taxpayer money to bail out VC firms, particularly through FDIC funds. Group of colleagues celebrating success in a meeting. ![]() ![]() Hence, we should recognize the importance of the VC industry for its significant contributions in fostering innovation and creating new opportunities for global prosperity and growth. The success of VC investments can have a trickle-down effect, benefiting not only the wealthy but also employees of startups and the broader population. Moreover, unlike the concern with banks, where there is a perception that they primarily serve the interests of wealthy clients, VC firms, in a way, cater to the needs of both ordinary people and affluent clients. It actively contributes to driving economic growth, creating job opportunities, and enhancing the overall quality of life by introducing innovative products, services, and technologies. Similar to the banking industry, the VC industry also holds fundamental importance for the economy and society. It is important to acknowledge the significance of VC firms, as they play a crucial role in funding and nurturing innovative startups that have the potential to disrupt and revolutionize various sectors. DUNCANSON/AFP via Getty Images) AFP via Getty Images ![]() (Photo by Mario Duncanson / AFP) (Photo by MARIO. However, we must ponder upon the question of why Main Street should bear the burden of the mistakes made by VC firms. In a way, their funds were effectively rescued, resulting in a de facto bailout. Had it not been for the extension of FDIC insurance to an unlimited amount, surpassing the usual cap of $250,000, these firms, along with other clients of the bank, would have suffered substantial losses. We recently encountered a somewhat analogous situation where certain VC firms faced difficulties due to the collapse of the bank where they had substantial funds deposited. This growing frustration and anger towards the banks have given rise to a demand for greater accountability and transparency, as there is a prevailing sentiment that these banks are not adequately serving the needs of the general population. ![]() The protest was held to "demand an end to the Too Big To Fail doctrine, request that their projected $23 billion in bonuses and compensation go to foreclosure prevention programs, and call on Congress to take immediate action on reform." (Photo by Alex Wong/Getty Images) Getty ImagesĪnother factor fueling the anti-sentiment towards TBTF banks was the concern that they prioritized the interests of their wealthy clients over the well-being of ordinary people. WASHINGTON - NOVEMBER 16: Activists protest in front of the DC office of Goldman Sachs November 16.
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