This is the Cato Daily Podcast for Wednesday, March 15th,

2003. I'm Caleb Brown. The failure of Silicon Valley Bank spurred the

FDIC and Federal Reserve to action.

So is it a bailout?

Cato's Norbert Michelle says, you bet it is.

Depositors will be made whole by FDIC.

That means imposing costs on other banks

and quite likely their customers and depositors.

We spoke yesterday. Silicon Valley banks shareholders are going to be wiped out.

Is that right?

Looks that way.

Okay, so one of the questions I hear from social media and I didn't have a really good answer to it immediately is,

well, how do you call this a bailout if all the shareholders get

wiped out? Well there's there are different degrees of bailouts and this is it's true that they're

not bailing out those shareholders for those shares if it goes that way.

But that doesn't mean that there's no bailout here. You had uninsured depositors who are being made whole.

Some of those are probably shareholders as well. I don't know.

Irrelevant though because you've got uninsured depositors being made hold. By definition that's a bailout and to say that because

the shareholders aren't being bailed out in this particular instance it's not a

bailout is much too narrow of a view. What you've got now too is this systemic

designation where all uninsured depositors are being told, hey don't worry about it, we

got you covered. We be in the federal government and what that means is that any

...