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Comment by Narkov | Hacker News Reader

> The FDIC insures deposits up to $250k. That covers the vast majority of accounts at most banks. So a run won't occur at most banks.

That's akin to saying my house won't burn down because I have insurance. Don't underestimate the stupidity of large crowds of people.

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Pragmatically, the FDIC is very effective at moving things around with minimum disruption.

I still have cheques that say Washington Mutual on them; literally no disruption to my life when they started floating upside down.

Terrible analogy. The insurance in the case of banking deposits changes human behavior to entice them to leave the money in the bank. History shows it. Fire on the other hand isn't aware of insurance, and if anything it makes humans less careful and your house more likely to burn.

This "don't underestimate the stupidity..." might feel like a clever or wise speech to give, but history suggests the FDIC has been incredibly successful at reducing bank runs. Insert "those who don't learn history...." speech here.

No FDIC insured account has ever lost a penny, despite bank failures happening.

I don't disagree with you. Bank runs can still happen even with the (successful) FDIC backstop.

Hm? Plenty of them did back in 2008. They were only insured uptm to $100k back then, it's up to $250k now but anyone who has more than that in the bank, which plenty of companies do, is sitting on a pile of risk. So then you withdraw your money from SVB down to $250k and then everyone else doing that - you have your bank run.

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