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Comment by NordSteve | Hacker News Reader

Only 3% of deposits in the bank are FDIC insured; other depositors will need to wait for the receivership process to run to get access to (what remains) of their deposits.

edit: replace "bankruptcy" with "receivership" as the latter is usually a faster process than the former.

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Where'd you get the 3% figure? The only thing I saw in the article was that it was not determined.

> At the time of closing, the amount of deposits in excess of the insurance limits was undetermined. The amount of uninsured deposits will be determined once the FDIC obtains additional information from the bank and customers.

Is the 3% figure from SVB or an estimate from another source?

https://twitter.com/GRDecter/status/1634208652595699713

Thanks!

Likely number is bigger than 3%, as they had a giant outflow over the last couple days.

This isn't true. The bank is in receivership and which is a different form of bankruptcy. The FDIC will liquidate assets or find a buyer relatively quickly. Depositors will end up getting most or all of their money back.

Only 3% of accounts were under 250k. An account of $251k isn't part of the 3% figure, but is almost totally insured.

Bill Ackman and Wall Street calling for a government bailout for all depositors:

https://twitter.com/BillAckman/status/1634032841687285761

I can't see that happening in today's political climate. Imagine the stories juxtaposing coddled tech workers against the cost of the bailout.

And what is the cost of the bailout, oh sage?

> As of December 31, 2022, Silicon Valley Bank had approximately $209.0 billion in total assets and about $175.4 billion in total deposits

I have a hard time believing they lost 20% of their assets in the last 70 days. The shortfall, if any, should be minor.

I think the asset figure did not include unrealized losses on bonds that they intended to hold to maturity as banks are not required to deduct those from their total assets. As deposits flowed out of the bank, they sold some assets and realized those losses.

The FT reported a couple weeks ago that they had an unrealized loss of $15B in bonds: https://www.ft.com/content/0387e331-61b4-4848-9e50-04775b4c3...

I think we'll have a much better idea of the shortfall, if any, over the weekend as the FDIC tallies up the remaining assets and deposits.

AKA the inversion of long and short term treasury absolutely screwed them and JPow announcing additional rate hikes was the nail in the coffin.

Could the Fed do this in a back door way? Buy the devalued bonds at above-market rates?

The FDIC will pay uninsured depositors an advance dividend within the next week.

> Only 3% of deposits in the bank are FDIC insured

why is that?!

Because most of their depositors were business that kept >$250K (the insurance limit) in the bank.

Why would someone keep more than $250K in bank deposits? Isn't it more prudent (looking back no more than 15 years) to keep T-Bills or some other liquid security that isn't subject to a bank run?

$250k isn't much for a company with employees

you have to keep some cash somewhere to meet short term expenses (like payroll)

Is it not possible to meet short term expenses with a short term loan which is discharged over a few days by selling liquid assets? Maybe banks just don't want to let you do that.

It is, and no prudent company should have lost their entire war chest unless their funding arrived just yesterday. But when you're spending $10M or $100M a year, it's operationally challenging to make sure you never have more than $250K in the bank while you're doing it. (It's much, much better to be imprudent and have too much in bank deposits than miss payroll because you have too little.)

Because the insurance is for $250k and most depositors had much more than that.

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