[vikramkr]

Why would my explanation read as absolving them of responsibility? The folks running the bank are professional bankers. They took a position that massively exposed them to interest rate risk and market cycle risk (when all of their clients are concentrated in a single industry!). As I said, they'd have been fine if they didn't need to cash in on those bonds or if interest rates stayed low. Making that assumption that they wouldn't need to sell (i.e. deposits would keep coming in) was obviously very stupid and failing to hedge interest rate risk (when high interest rates might directly lead to lower deposits because of the vc/startup client base!) is an even higher level of stupid that led to the whole thing collapsing in 48 hours. That doesn't invalidate that the bonds are still good/they have assets greater than deposits (though obvioust rhere could be fraud/devaluation when they try to sell) and that the FDIC has a pretty good chance of getting most people's money back (eventually, hopefully).