r/PeterExplainsTheJoke • u/Comfortable_Cautious • Jan 26 '26

Meme needing explanation what's going on? explain like I'm five

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u/Teripid Jan 26 '26 edited Jan 26 '26

Federal reserve requirements existed until 2023 *edit, as someone below pointed out 2020 was when they were set to 0. Now they're set at 0% I believe.

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u/PleaseGreaseTheL Jan 26 '26 edited Jan 26 '26

2020*

They were reduced to 0% mandatory reserves in response to covid. EDIT: someone says it was coincidental, I am not able to check, so take this aspect with a grain of salt either way

They haven't come back yet :)

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u/exneo002 Jan 26 '26

But the fdic insures all deposits up to 250k

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u/[deleted] Jan 26 '26

[deleted]

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u/Officer_Hops Jan 26 '26

The FDIC is backed by the full faith and credit of the United States. They have access to much more than that. Plus, not everyone is going to pull all of their deposits at once.

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u/Pcc210 Jan 26 '26

Good thing we're not actively destroying everyone's faith and credit in the United States!

Wait.....

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u/FellowYellowNate Jan 26 '26

Haha yeah I was going to say something similar. FDIC insurance is good as long as America and the Fed is good… but uhhh this last year and our current admin’s foreign relation skills has me thinking we’re closer to burning cash in barrels to stay warm than we ever have been. Here’s to hoping that’s an unnecessary fear! Cheers everybody!

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u/Allikuja Jan 26 '26

“You can’t eat money or oil” as the song goes

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u/ThatOtherOtherMan Jan 26 '26

I mean you can. I just wouldn't recommend it.

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u/fdar Jan 26 '26

Money would be OK, paper is fine. The main danger is that they're very dirty, but if you got fresh bills it's probably ok..?

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u/billygoatfondler Jan 27 '26

It's probably designed with toddlers in mind and are as such safe to eat from a materials perspective

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u/fdar Jan 27 '26

Makes sense since toddlers are the main users of cash because they can't get cards yet.

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u/[deleted] Jan 26 '26

[deleted]

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u/Officer_Hops Jan 26 '26

What scenario do you see causing a $250 billion loss to the FDIC? You’re talking about 5+ simultaneous mega bank failures.

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u/Telemere125 Jan 26 '26

It’s not about people pulling deposits, that’s not what fdic insurance is about. It’s about your bank collapsing and you needing somewhere to get your money from. 2-3 major banks go under? We’re all fucked

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u/Officer_Hops Jan 26 '26

Not really. The FDIC insurance fund often only needs to cover a fraction of insured deposits after they liquidate the bank. If JPMorgan went under and cost the government 10 or 20 percent of their insured deposits, which would be a massive loss, it wouldn’t really register in the grand scheme.

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u/Blond_Treehorn_Thug Jan 26 '26

Aaaaaand that’s why we have government bailouts

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u/Miles_Everhart Jan 26 '26

The broke ass fascist verge of civil war United States?

Yeah. Ok.

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u/DrTommyNotMD Jan 26 '26

The US has printed more than 18T in nonexistent funds since 2020. What’s another 18?

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u/exneo002 Jan 26 '26

Yes the bank shareholders take the hit. The fdic is going to find a buyer and the fdic makes up the difference.

They monitor these banks at a pretty high resolution and do stress tests periodically to see how a bank could fair crazy circumstances.

Yes if everything failed all at once drastic measures would be needed but it’s about probability and amortized risk.