Covering uninsured deposits is common as they retain their senior debt status. Guaranteeing them on the other hand is very new.

And if we are going to expect them to be guaranteed in the future insurance rates must go up, not just to cover more things but to cover the riskier behavior it creates.

If we aren’t going to cover them 100% in the future then apparently it’s true that there are not just different classes of banker but different classes of depositors.

I think this move probably saved the FDIC money. If you had a massive bank run(1), it's probably cheaper to pay back 250k+ depositors of one bank than for the FDIC to pay out < 250 on 40. Not to mention unloading enormous amounts of MBS's could trigger further insolvencies.

1. which seemed pretty likely, I know people who over the weekend were planning to pull all of their money out of a regional bank and put it in one of the 4 super banks Monday morning)

> because their assets are fine (just inconveniently structured) If assets are so inconveniently structured that the bank fails, then the assets are not fine. A bond that pays 0.01% that never matures has an infinite value over infinite time. So while the FDIC/gov can solve the liquidity issue by replacing a $100 face value bond with $100 cash but that's still a net transfer of actual value from the FDIC i.e other banks.

As far as I know, regulatory requirements require/encourage holding good bonds but if the FDIC is going to start treating gov/muni bonds of any maturity length as good as cash, then there's less reason to hedge against interest rate risk.