[jaxr]

Who scrutinizes the banks they make business with? To me, that is exactly the role of the regulators. Make sure the banking system is sound, and if you get the license to run a bank, you do it under certain rules that will protect depositor's money. I don't see how depositors should be held responsible in this case. And worst of all, you are actually punishing depositors who trusted the bank and the banking system, versus the ones that caused the run. Which in my view are also not to judge, since they were only protecting their assets.

[danielmarkbruce]

People with money and a brain. Smart businesses have a treasury department, one job of which is to look at the risks of where their money is.

[bpodgursky]

It's an incredible waste of time and energy for every business to do this.

Imagine if every company was responsible for making sure their catering services didn't poison their employees. Technically, every company could hire a food safety department to validate that every catered lunch wasn't toxic.

It would be a stupid waste of resources! Businesses should be able to just buy food that isn't toxic! Likewise, they should be able to simply put their money somewhere that isn't dangerous! So they can focus on the solving new problems that every isn't solving pointlessly in parallel.

[danielmarkbruce]

The amounts of money involved, the relative infrequency required and the relative ease of doing it mean it's absolutely not a waste of time. And it's done by smart companies all around the world today.

Talk to anyone in the treasury function at any company of any reasonable size, most of them will be doing it.

[leehuffman]

I think you’re missing the piece where “company” means any registered legal entity. This can be a single human to <= 8 employees to <= 50 employees to >= 1000.

You’re getting lost in the current context of what you assume to be SVB’s majority customer; the banger ‘unicorns’ we’ve all read about over the last decade, who would/should have this ‘treasury department’ you’re referencing.

Zoom tf out, remove SVB, and tell the guy who fixed your fucked plumbing last go around that his lack of a treasury department and/or insight into what his primary bank is doing with their deposits is a major problem and they deserve to eventually get fucked because of it. I’ll wait…

[danielmarkbruce]

FDIC insurance is up to 250k. It's covers the plumber. Any small business (and most consumers) doesn't need to think about this stuff.

The comments above are about companies with millions of dollars. It starts with someone talking about $5 million.

[killerstorm]

An average house costs more than $250k. If the system cannot secure a typical transaction people make, it's a shit system.

[pclmulqdq]

If you're depositing $10 million, you should be willing to spend $100k reading a few balance sheets. That's why the limit is $250k.

[danielmarkbruce]

The CFO at any reasonable company can read the balance sheets of a few banks in a few hours and will need to do it 4 times per year. It's days of work, not more. And if the company is big enough, this job will be in the treasury team and again, it's certainly less than $100k worth of work.