Most likely nothing - after all bank crises are non-linear, but as Bloomberg notes, "still, they are developing a strategy out of due diligence in case the situation worsens.
"Since our administration and the regulators took decisive action last weekend, we have seen deposits stabilize at regional banks throughout the country and, in some cases, outflows have modestly reversed.
What about the practice? After all, as regular readers know there are $18 trillion in total deposits, all of which will have to be insured.... ... and just $125 billion in the FDIC's Deposit Insurance Fund, which makes an outright guarantee of all deposits just a small mathematical impossibility.
The same magical Exchange Stabilization Fund which the Treasury is already using to backstop its latest bank bailout facility, the Bank Term Funding Program, or BTFP. Here too there is a small problem: that ESF pot of money is used to buy or sell currencies and to provide financing to foreign governments.
LOTS of leverage, because if authorities plan on backstopping the $18 trillion in total US deposits, the Fed will need to cover the difference... of some $17.975 trillion would actually increase risk in the banking system.
"While such proposals might reduce the likelihood of bank runs, they would at the same time reduce banks' incentives to control risk.
Will US bank regulators learn from the mistakes of the past?
https://www.zerohedge.com/markets/us-studies-how-guarantee-all-18-trillion-us-bank-deposits
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