By doing this, the Federal Deposit Insurance Corporation (FDIC) effectively subordinated the unsecured senior debt to depositors, thereby fully protecting depositors while also eliminating any potential deposit insurance liability to the FDIC itself. In this and similar cases, specific regulatory and oversight powers can lead to senior lenders being subordinated in potentially unexpected ways.
The Federal Deposit Insurance Corporation (FDIC), by taking this action, effectively subordinated unsecured senior debt to depositors, ensuring full protection for depositors while also eliminating any potential deposit insurance liability to the FDIC itself. This emphasizes how regulatory and oversight powers can lead to unexpected subordination of senior lenders in specific situations.