from Balaji | by Balaji

The message the market has received is: deposits are unsafe unless they are in a too-big-to-fail bank. Small banks get piddly FDIC insurance. Big banks get the full backstop of the US government, because they're systemically important. Bail out the big, submerge the small.

Of course, becoming a too-big-to-fail bank comes with strings. It means you are de facto nationalized. The Chinese call them state-owned enterprises, the Americans call them systemically important financial institutions. t.co/BniRUVnvno