patrick.net

thomas.wong87 says

bob2356 says

What makes banks so special that they couldn’t have gone into bankruptcy like anyone else. Business continues, just under protection of the court.

Read my statement above! Bankruptcy for a bank wouldn’t work… so what happens to the funds on deposit by the public and other entities, like your employer who pays his payroll and vendors from the funds in the same bank. Ho hum! banks go under and ho hum everything goes like any other day… Jez! get real!

Nothing happens to the deposits, they are FDIC insured (until the FDIC runs out of money, coming very soon). The bank operates under a bankruptcy judge or the FDIC. The business, what you are calling deposits, gets sold to a healthy bank. Creditors, bondholders, and stockholders take a bath. At least they should in a capitalistic society. That's the burden of being an investor, researching you investments. It's called risk management.

Banks go through bankruptcy all the time, but it's almost always through the FDIC not a bankruptcy judge because of FDIC insured accounts. Investment banks don't have FDIC insured accounts so they go to bankruptcy court. Or should have instead of being bailed out. You don't cure gamblers by giving them more money and sending them back into the casino. That is exactly what has happened. With your (and your children's and your grandchildren's) tax dollars.