[gucci-on-fleek]

> they don't really have a vault full of everyone's cash always available.

When the Silicon Valley Bank collapsed, funds were only inaccessible for 72 hours, and no depositors lost any money [0]. Which is still not ideal, but most people will never experience a bank collapse, and there are plenty of banking activities that will take longer than 72 hours to process in regular circumstances anyways.

[0]: https://en.wikipedia.org/wiki/Collapse_of_Silicon_Valley_Ban...

[vitus]

Indeed; most personal banking customers can fall back on FDIC insurance ($250k should be more than enough to cover your emergency fund). This isn't the 1920s.

[Teever]

It sure isn’t the 1920s, it’s the 2020s so things like digital money are ephemeral and whimsical.

The bigger question is how much food and medicine is there in the supply chain buffers? If all production was to stop immediately — how many calories are on the continent? How many grams of insulin or penicillin?

In a crisis how will those things be distributed? Will it be based on immediate need or social class?

What’s keeping the system going anyways? Why do ships continue to come with consumer goods from China? Why do farmers send their grain to market?

It’s kind of neat to think about what will happen in this sort of scenario. I wonder how long the data centres will keep running, churning out models that don’t have a market an aren’t quite good enough for AGI.

[eru]

Alas, for Silicon Valley Bank they went with 'too big to fail' and also covered uninsured deposits. That's moral hazard and endangers the core purpose of the insurance.

[vitus]

Agreed. That said, FDIC would have not been able to cover all $150 billion or so of uninsured SVB deposits directly from the insurance fund, so had that been the only available option for making depositors whole, then FDIC would have had to pass.

[eru]

Well, insurance should only covered insured deposits.

> [...] so had that been the only available option for making depositors whole, [...]

On paper, FDIC might be independent and have its own balance sheets. But in practice and given politics, FDIC itself can't fail / isn't allowed to fail. It'll always be bailed out, and that's what the market expects.

For the stability of the economy, it would have been better not to make uninsured depositors whole.