A sale of assets to cover liabilities is the normal procedure. It does not constitute 'help' and does not guarantee depositors will be made whole in the end (I understand that another issue is that many depositors need the cash right now, not in 6 months).
The government will probably want do something to prevent contagion and companies from going under but politically the key is how that help will be financed. The political issue is to use taxpayers' money to help Silicon Valley because, obviously, the optics would that money from struggling families is diverted to help millionaires in the Bay area.
Note, I am not in the US so I am a bit fuzzy on whether 'government' means Washington D.C, Sacramento, or both in varying degrees. But I think the political aspect is the same either way modulo how much clout SV has in one relative to the other.
Here in the UK the government is also considering help, not least before the budget is going to be unveiled this coming week, and I suspect the political aspect is the same. There's high inflation, people are struggling, taxes are rising, and so handing out 'free' help within a matter of a few days to people/companies that are viewed as being in the top 10%, if not 1%, may not be popular. Better to show that help will be such that it won't cost the taxpayer.
yeah, so it all comes down to a math equation that includes things like: how many banks also did risky things are are likely to experience a run on Monday, how to stop the potential contagion, and how to maximize the liquidation value of SVB. All these people yelling what "should" happen or who "deserves" or "doesn't deserve" what are detached from reality.
The government will probably want do something to prevent contagion and companies from going under but politically the key is how that help will be financed. The political issue is to use taxpayers' money to help Silicon Valley because, obviously, the optics would that money from struggling families is diverted to help millionaires in the Bay area.
Note, I am not in the US so I am a bit fuzzy on whether 'government' means Washington D.C, Sacramento, or both in varying degrees. But I think the political aspect is the same either way modulo how much clout SV has in one relative to the other.
Here in the UK the government is also considering help, not least before the budget is going to be unveiled this coming week, and I suspect the political aspect is the same. There's high inflation, people are struggling, taxes are rising, and so handing out 'free' help within a matter of a few days to people/companies that are viewed as being in the top 10%, if not 1%, may not be popular. Better to show that help will be such that it won't cost the taxpayer.