The Cost of Bank Bailouts: Who Pays?

The Biden administration has guaranteed uninsured deposits at two failed banks, Silicon Valley Bank and Signature Bank, to prevent a broadening panic. Taxpayers will not bear any direct cost for the failure of these banks, but other banks may have to help defray the cost of covering uninsured deposits. The Federal Deposit Insurance Corp. will likely cover most of the cost of guaranteeing all deposits at both banks, and any costs beyond that would be paid for out of the FDIC's deposit insurance fund. The fund is maintained with fees paid by participating banks, and if necessary, it will be replenished by a “special assessment” on banks.