[gamblor956]

The issue was not bank entanglements.

The issue was the bank putting all of its deposits in illiquid long-term bonds that were worth substantially less if sold pre-term, and compounding that problem by becoming insolvent selling a large chunk of those bonds per-term at a huge loss to cover immediate liquidity needs.

[tom-thistime]

Looks like it. Except I don't see that the bonds necessarily weren't liquid. They just kept going down as the Fed cranked rates up.

As some others have said in this thread: I'm just trying to talk about what happened, within my limited understanding. I'm not talking about who was right or wrong at all.

[johnbellone]

I am referring to the fact that startups that are being advised by VC firms had a requirement to keep their funds in the bank. If you think that SVB and the VC firms didn't have a special kind of relationship you're missing the facts.

[gamblor956]

I'm aware of the relationship betweeen SVB and the VCs, but it seems that you're confused about what you're arguing.

You're blaming depositors (specifically VC-funded startups) for "benefiting" from a relationship with SVB they were forced into by VCs, and want to deny making all of SVB's depositors whole on the basis of a bank relationship that, for many, was not their choice. Worse, you want the fact that VC-funded startups over-depositing their cash reserves in a single-bank to be used against non-VC funded depositors (i.e., other businesses in the SV area) to deny making them whole on the basis of a "special relationship" that was simply "geographically closest bank willing to provide a loan and banking services."