[dwighttk]

>it might have been a bad idea, since it encouraged future risk-taking in anticipation of a similar ad hoc rescue.

From what I understand (could be wrong) the discouragement to risk taking is that the risk takers were wiped out in this case, only the depositors kept their money.

[tripletao]

The SVB's shareholders have indeed been zeroed. The shareholders of other banks will benefit from the undercollateralized lending program though, in proportion to the amount of bad interest rate risk they took.

I don't think these are necessarily bad decisions--it's reasonable to make an example of the worst offender, and then help the rest survive to prevent systemic contagion. It's absolutely not "the system worked" though, except to the extent that the system is regulators making stuff up on the fly.