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Comment by Aperocky | Hacker News Reader

The subject is wrong though, SVB isn't getting bailed out, their depositors are. At the end of the day, SVB as a bank would be no more/the ownership would be washed.

The depositor didn't do anything wrong, they had the full right to withdraw at anytime and they didn't make the decision to invest into long term illiquid low interest MBS in 2021.

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> The depositor didn't do anything wrong

They did if they deposited money above insured amounts.

There are plenty of necessary reasons for business to have money in accounts above $250k. There should be no exposure here, this is the US banking system - bank deposits should be guaranteed by the entire system (not the taxpayer). Let the shareholders burn, fine... but cmon man, what does anyone get by letting depositors lose capital when placed in US banks?

> There are plenty of necessary reasons for business to have money in accounts above $250k

Sure, and they know what's insured and accept those risks.

> There should be no exposure here

Bullshit. There's a gradient here: There are some depositors who have $750k and others who have many millions. What many of them (the latter group) were doing here is simply bad financial practice. I have to do better with my personal finances. Why don't they, too? Because more people depend on them? That's pathetic, they should do better because people depend on them.

And let's not pretend like they don't have options. They do. The individuals (corporate officers) losing money here (hypothetically, since they're going to be made whole) are supposed to be competent leaders. They're showing the world their asses.

Many employees had all their 401k tied up in enron too.. They were heavily encouraged by the employer, and it saw great gains for years. Doesn't mean that they should ignore financial advices and diversify to reduce risk...

> bank deposits should be guaranteed by the entire system (not the taxpayer)

Where do you imagine this money ultimately comes from?

The same place that took trillions of dollars in exchange for low-yielding treasury bonds. The same place that effectively devalued said treasury bonds when they decided to rapidly raise interest rates.

do you expect a company with $100MM in the bank to bank with 4000 different banks in order to keep their cash secure and insured?

One could do that, but there's plenty of other options available to insure amounts above $250k.

I expect them to explore their options, of which there are many, varied choices.

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