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Comment by chernevik | Hacker News Reader

The basic analysis that the costs will ultimately fall on other banks' depositors is correct.

That's why it's a bailout.

A bailout usually means "company kept afloat via direct cash infusion from the government". In this case, the company and its assets are being liquidated to pay its depositors. The special assessment is to replenish any money spent by the FDIC's insurance fund, and as the press release says, that is required by law.

You can have your own private definition if you like, but people talking about financial failures having using the term "bailout" in connection with all sorts of stakeholders for decades.

The word games being played around this are just embarrassing.

Then let's call it what it is specifically instead of using such imprecise language: It's the sale of the assets of a bank in order to guarantee depositors' funds. It's not like the way zombie banks were given money to continue to exist in 2008, or the way the GM and Chrysler were given money to continue operating at the same time.

The use of broad-to-the-point-of-meaningless but emotionally charged terms like "bailout" results in stories that distort what's actually going on to fit a particular narrative.

Because SVB is not actually bailed out. The company is dead, this just means the depositors don't lose their holdings and we don't watch a whole economic sector melt down while we debate the definition of words.

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