Every investor in the holding company knew this.

Reader comment on: Bair's Big Speech

Submitted by Lyle (United States), Nov 2, 2009 18:46

Since what happend has been the law since 1933 investors knew or should have known what would happen to them. So I don't feel much sorrow for them. Note that the FDIC took over the bank subsidiaries not the holding company which is regulated by the Fed. In the case of a bank the priority of payment is expenses of the reciever, then depositors, then the creditors. Note that the holding company was affected by having its largest asset taken away (The bank), so it had to file a regular bankrupcy. The FDIC does not concern itself with Bank Holding companies yet, but that is a part of the desired resolution authority being discussed in congress.

To answer which were protected, Bank of America, Morgan Stanley, Goldman Sachs etc. stockholders were protected.

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