The purpose of the $250k per-person-per-bank limit is to encourage large depositors to spread their money among many banks, which reduces risk for both them and the system. However, it's not clear that this limit is really the ideal design.

In the financial crisis 15 years ago, the FDIC in practice guaranteed 100% of deposits. They had to in order to keep people from running all the banks. Since then, we've all been told that banks are safe now because of new regulations. Lots of people have become complacent and haven't felt the need to manage multiple bank accounts to stay within FDIC limits.

SVB's collapse has suddenly let everyone know that, oh, those FDIC limits do actually matter and if you are over them in any of your accounts you had better start moving money. Unfortunately, that's likely to result in runs on lots more small banks as everyone moves their balance in excess of $250k over to JP Morgan (the bank that definitely can't fail).

Sure, it's easy to say now that it's all those people's fault for not managing their risk properly. But not long ago, a $2.5-millionaire opening 10 different bank accounts to stay under FDIC limits would have been called paranoid. And in any case, stupid or not, allowing runs on lots more banks could at some point lead to large-scale collapse of the financial system, which would be bad for much more than just those large depositors.

So it may be in everyone's interests for the FDIC to once again guarantee 100% of deposits. (I say "may", I don't pretend to be enough of an expert to decide this!) And maybe the $250k limit should be rethought going forward, into some other sort of rule that encourages diversification without encouraging contagion when a big bank fails?

(Disclosure: I had an account at SVB, but it was under the FDIC limit. So I don't have any personal need for a "bail out".)