[WJW]

Step 4: receive your complementary court summons for market manipulation.

As a more practical matter, you would need a very large sum to do this for even mid-sized banks. SV bank alone had over 200 billion in assets, so you would need at least ~10 in cash to make a significant dent in that. If you have that much cash in any bank, there are probably many options you could go for that promise bigger profits at less risk.

[xur17]

So a new target for /r/wallstreetbets?

[WJW]

Perhaps, but probably not. Just doing some napkin math, to get to ten billion in withdrawals (ie only 5% of total assets of SV bank) you would need a million wall street bets subscribers to withdraw 10k each. Not a million to deposit it first and then retract it, a million retail subscribers who already had at least 10k deposited in this bank that mainly serves startups. I don't think it's very likely.

Also, it would still be extremely illegal to arrange this with the express purpose of causing a bank run. The excuse of "yes but it was on r/wallstreetbets" is not probably very impressive to the SEC.

[toomuchtodo]

While it’s unlikely we’re going to see a meme stock moment, a bank run by a collection of risk adverse founders already facing a challenging macro pulling their deposits is entirely possible. And those cash balances are likely much more than 10k assuming runway liquidity.

https://news.ycombinator.com/item?id=35086853

https://news.ycombinator.com/item?id=35086888

[WJW]

Yes but people rationally pulling money from a failing bank is very different than a subreddit banding together to kill the bank on purpose.

[resters]

It really shouldn't matter. An elevator full of people shouldn't fail just because they all jump in unison, so long as the number of people / weight is below the maximum capacity.

We view banking differently because ultimately banking is political and powerful people benefit from being able to leverage without a pre-defined plan to handle some aspects of the downside risk, even though creating such a plan is straightforward. Creating such a plan would surface the cost of the plan in advance and it's easier to pretend it was an "impossible" and unanticipated phenomenon rather than just greed.