[JackFr]

Agree.

SVB was not small, but an order of magnitude smaller than the large money center banks (Citi, BofA, JPMChase).

That being said, nearly every other bank of that size submitted Dodd Frank Stress Test results to the Fed in 2022.

https://www.federalreserve.gov/publications/files/2022-dfast...

Somehow SVB avoided this. I don’t see this as systemic at all. The FDIC will make depositors whole and the owners and managers did a bad job and they lose. The worst possible response would be a bailout of any sort beyond ordinary FDIC receivership.

[boppo1]

97% of depositors exceeded the FDIC limit.

[phone[phone]]

That stinks, and I feel for them. Let's hope people will learn a lesson from this - never keep all your eggs in one basket.

[otikik]

What about this other lesson: bankers need to be punished harder.

[youngtaff]

Or perhaps the other lesson is VCs shouldn’t create a run on the bank they holds their funds and the companies they invest in funds

[phone[phone]]

We don't punish bankers in this country.

[fbdab103]

Aren't we talking about hundreds of millions/billions of dollars? At that scale, not a lot of baskets available.

[throwing_away]

Could a tech company have split their accounts into separate $250k accounts? I'm not sure if the bank would offer that.

[x3n0ph3n3]

No, FDIC insurance applies to account owners, not accounts.

Fun fact, if you're married, you can actually turn that into 3 * FDIC insurance limit.

- Account 1: You

- Account 2: Your spouse

- Account 3: Jointly you and your spouse

[paulclinger]

Even more: single, joint, retirement, revocable and irrevocable trust accounts all fall into different categories and are insured independently for each account owner in each bank (the joint account is 250k for all co-owners): https://www.fdic.gov/resources/deposit-insurance/financial-p...

[edulix]

Or you could hold short-term t-bills for any extra money over the FDIC insurance limit. Then you are good unless the US Gov goes bankrupt, which is a non-zero risk but much lower and different.

[quesera]

You'd need to split across multiple banks.

This can be done manually, with some logistical challenges.

This can also be done automatically, e.g. via CDARS.

[HyperSane]

Then they should have understood the risk they were taking.

[WeylandYutani]

And chosen a better bank.

Besides common strategy in my country: have more money than 250k spread it around at multiple banks.

[HyperSane]

There are services that do that automatically.

[ageek123]

I’m not sure you’re using the standard definition of “make whole”…