[stanmancan]

> Because the taxpayers bail them out. I could define anything as not being risky if I knew taxpayers would bail it out.

I feel like I must be misunderstanding something here because it sounds like you're saying depositing funds in a bank is considered risky behaviour?

[devman0]

It is supposed to be if the amounts are above $250,000. I have no problem with the first $250k being risk free, that is a policy that is well published and that we all "agree" on. Making arbitrary policy decisions that in some cases depositors should be made whole when risky behavior (such as depositing above the insurance limit) bites them is problematic. Stick to the policy or change the policy don't make one off exceptions because that sets weird expectations.

89% of deposits at SVB were uninsured.

[zeroonetwothree]

I’m sure you would feel differently if it was your employers money there and they weren’t able to pay your salary.

$250k is not much at all for a business

[devman0]

Businesses can use deposit management services to spread cash among many banks. Bonus points they also are less impacted by the poor business practices of one bank.

Individuals can do this too with investment brokers or wealth management providers.

Alternatively we could just made FDIC coverage unlimited, but then that creates poor risk taking incentives, which is the whole point of not setting the expectation of the a bailout by making exceptions.

[chasd00]

> depositing funds in a bank is considered risky behaviour?

of course it is, that's why the bank pays you interest on your deposit. They loan out what you deposit at a higher rate and collect the difference as profit. If that loan defaults then your money is gone because the bank was never able to collect it back. FDIC was invented to insure your deposit up to 250k so you're protected (up to 250k) in case that happens.

[bpt3]

No, the bank pays you interest on your deposit to entice you to deposit money there so they can lend it out. There is literally zero risk involved (other than something on the scale of the collapse of the US government, which no one is really considering here) because of the FDIC, and yet interest rates on FDIC protected assets are not 0%.