Why Don’t Uninsured Deposits Take Losses Anymore?
Bank Nerd Corner welcomes Michael Ohlrogge, a professor of Law at New York University’s School of Law, to talk about the realities of uninsured deposits, deposit insurance and bank failures.
Professor Ohlrogge’s paper, “Why Have Uninsured Depositors Become De Facto Insured?,” explores how usual, or unusual, it is for uninsured depositors to take losses when a bank fails.
Ohlrogge’s research found that prior to 2008, it was common for uninsured depositors to take a haircut on their uninsured funds when their institution failed. Today, when a bank fails, it’s very normal for most, if not all…
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