[tangjurine]

No.

First SVB was bailed out by FDIC funds which all banks pay into.

Second, to say 'privatized gains, socialized losses', you are assuming that banking is like gambling, with no value being created through the banking process.

Even if banks were being very very safe, they would still make money by lending out deposits. (Whether that is good or bad for society, is another question, which I would argue the answer to would be bad).

[digitaltrees]

These are great points and show that the system worked as designed. There will always be bank failures. We want depositors to have confidence that their deposits are safe, not altruistically, but to prevent bank runs since those serve no one and re totally avoidable. Management and Shareholders were wiped out.

Honestly, it looks like in a year or two, the Government will make money off of this because as soon as interest rates come down the securities will go back to book value.

The real winner here is Goldman, since they bought the bond portfolio from SVB that triggered all of this at a discount and can hold to maturity and interest rates may need to come down or a broader asset exchange program implemented to stop any contagion, so those bonds will return to book value sooner than expected.

[watwut]

That is what insurance was supposed to be for and it was up to 250000. Anything above that was supposed to be returned from sold assets. When assets are not enough, those money would be lost.

There are literal products to insure money in excess of 250000. But people who are getting bailout now were not using those products. They were not paying for insurance in excess of that.

The system did not worked purely as designed. The system socialized loses of well connected rich people.

[prottog]

> Honestly, it looks like in a year or two, the Government will make money off of this because as soon as interest rates come down the securities will go back to book value.

Government will get back the number of dollars equal to the par value of those bonds. Inflation between now and then, however, will mean that in real terms there will have been losses.

[lossolo]

> First SVB was bailed out by FDIC funds which all banks pay into.

And from where this money is coming from you think? From you and me and everyone else because costs of doing business are transferred to clients, so to the whole society because almost everyone have a bank account.