The investors sure don't. But I'm not sure how failing to provide a backstop for deposits would help anything here other than the big four.
FDIC insurance doesn't make sense to me for businesses. If a startup receives $25M of investment, are they supposed to split it up over 100 banks?
I thought banks were were forced to have large reserves after 2008.
The issue now with SVB is that they have asset reserves. The banks don't actually have that much cash in reserve and aren't required to either, especially given interest rate increases. It's just a certain amount of assets.