Reply #65: Ball is in the depositors' court now

[econoclast]

If I was a BoA depositor I'd be on my way to the branch right now. BoA is asking the depositors to provide the capital cushion for the derivatives book. I have no idea what that book looks like (and neither does anyone else outside BoA). Hell, if it is chock-a-block with things that are winners if Greece Ireland et al default I might even LIKE the derivatives book. But because I don't know that, and they won't tell me (I'm sure) I'd be headed for the exit.

Any depositor who sits still for this is complicit in the outcome. If the thing turns to shit, then the FDIC will pay off the depositors. A classic case of moral hazard. Depositors might put up with this because they are insured by FDIC ( up to 200,000? 250,000? )

But if this transpires the depositors share the blame.