The extraordinary measure taken to quell concerns about bank deposits is the key indicator. Normally, the Federal Deposit Insurance Corporation (FDIC) insures bank deposits up to $250,000. The decision was made to cover all the deposits at the two banks that had failed.
No, it is not quite like the federal bailout of major banks in 2008, but it sure smells like it! The difference is only that the FDIC will reach into its reserves to pay the losses to individuals and businesses. The fund is not federal monies, but money collected from banks who pay premiums to have FDIC-backed insurance. Those deposits are not limitless and additional bank failures will be problematic.
Which brings me to the thought that we as a “world” are living on the edge almost all the time. Be it energy, the supply chain, drug production, etc., our world is a fine-tuned instrument that does not have a lot of redundancy in it. When there is a glitch somewhere, e.g., baby formula, it reverberates through the economy and people’s lives.
