[bostik]

Let's preface this by stating that I'm looking at things from outside the US, but nonetheless mildly affected by SVB's collapse.

There is already talk about rules being changed so that in case of an implosion like SVB, the executives' bonuses could be clawed back over a span of several years. That would be a damn good start, because it would put the C-suite personally on the hook for setting up these cock-ups. It won't be enough.

I hope, and would expect, that FDIC fee structure will also change. The best way to incentivise banks to spread their exposure risks across industry sectors will likely be to charge aggressively progressive fees for increased sector risk. Spread your risk across multiple, mostly uncorrelated sectors? Pay reasonable fees. Concentrate on just one or two? Get charged through the nose, to the point of stunting your profit margins.

Sticks and carrots are not always enough. Sometimes you do need modded, lethal cattle prods.