[jyl]

Depositor with under $250,000 will be unaffected. FRC will continue operating under federal control until it is bought or closed down, when account will move to another bank, slight confusion/inconvenience possible then but not much or long. For a CD, it’ll simply be paid back on time with no issues.

Federal Reserve/FDIC is experienced and effective at winding down failing banks. They move in like Delta Force, take control overnight (usually on a weekend), their #1 priority is protecting depositors.

SIVB and SBNY showed weaknesses in Fed’s supervision of some banks. Partly political (bank regulation was rolled back by Congress in 2018, prior Fed vice-chair for regulation was a “friend of the bank industry”), partly resources (there are way too many banks in the US, something like 5,000, and budget + pandemic stretched Federal Reserve bank supervision staff), partly normal human complacency after a decade with no major bank failures, partly rapid/poorly understood changes (NY Fed staff had never seen a crypto bank before).

Banks are going to feel rapidly toughening supervision, even before tighter regulations get through the rule-making process. Some will squeal like pigs about it. Banks benefit from a huge amount of government protection and support, including almost unlimited borrowing in times of need. They’re used to being able to leverage that support to make a lot of money. It’s called having your cake and eating it too. They fight any little bit of cake being taken away (which is why the regulations for regional banks were rolled back). A huge lobbyist force in D.C.