Washington Post Piece On SVB Failure Indicates Lack Of Internet – OpEd
By Dean Baker
The Washington Post apparently lacks access to the Internet, but it bravely struggles on anyhow. This lack of access was apparent in a piece on how Rippling, a payroll company, was struggling to find money to issue paychecks after the FDIC froze its account in the Silicon Valley Bank.
The piece never once mentioned that the FDIC had committed itself to make an advance payment on accounts with more than $250,000 the week after it took over the bank. We don’t know how large this advance payment would have been, but since it seems that FDIC could ultimately cover more than 90 percent of deposits with the bank’s assets, it would likely have been around 70 percent of the money in the accounts.
As the FDIC statement (issued at the time of the seizure) says, it would have also issued a certificate for the remaining funds. This certificate is marketable. Rippling, or any other depositor, would have been able to sell it immediately to an investor to recover a substantial portion of their remaining funds.
This may still have left Rippling with insufficient funds to meet all its payroll obligations, but it clearly would have been much of the way there. It’s too bad the Washington Post doesn’t have access to the Internet, otherwise it likely would have pointed out these facts in its story on Rippling.
This first appeared on Dean Baker’s Beat the Press blog.