depositors are only entitled to what is left over after resolution of the assets, nothing more! dont make this situation worse by advocating for something unethical and which is bad for the entire system
Of course, that is likely what they're getting. People with sub-$250k will be taken care of by the FDIC as expected and the $250k+ depositors will be made whole from the proceeds of asset sales (bonds, securities, et al) held by Silicon Valley Bank. I really don't think the U.S. government will step in to provide additional funds.
It's also possible that the FDIC might sell the remnants of Silicon Valley Bank to a larger bank that will assume all deposits.
> I really don't think the U.S. government will step in to provide additional funds.
If it was some small bank that was only impacting “regular people”, then probably the government would not do anything.
But that is not the case here. The depositors of SVB are very wealthy and powerful. Also the standard process of selling assets is too slow, and that delay could create a catastrophic domino effect. Famous investors are already calling for the government to fix the issue within 48hrs.
Maybe the government will step in as a temporary lender, letting depositors borrow against their deposits, which they will eventually get back.
To provide safe haven for the vast majority of people/orgs whose cash assets can fit in that bucket, since there's some scale at which you can't afford the overhead of privately managed risk management (diversification, private insurance, etc). It provides stability on the low end, especially for naive and casual wealth, so that their naivite doesn't cause problems for everyone else.
But above that bucket, people/orgs are expected to know and appropriately manage the risks that they're taking with their money or have the float to pay someone who does.
Experienced money doesn't see large bank deposits as safe by nature because they never have been. It's only people new to wealth and chronically blind to tail risk (hello startup industry!) that assume a $5M portfolio can be treated as casually as their personal checking account.
It's also possible that the FDIC might sell the remnants of Silicon Valley Bank to a larger bank that will assume all deposits.