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Comment by bentlegen | Hacker News Reader

Garry I have a question (and this is not intended to be snarky).

Why should a company, perhaps a slower and more risk-averse company who intentionally chose a different, safer banking institution to do business with, do they not get to benefit from their discretion in choosing that banking partner? One could argue that choice put them at a disadvantage against their fast-moving competitors, who chose fast-moving “corporate infrastructure” like SVB.

If bailouts like this take place, how do those companies ever benefit from being prudent? Should nobody bother?

(FWIW, this is just a thought exercise, I am not opposed to the petition.)

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Large bank failures are rare enough, that I suspect very few, if any, had intentionality to select a more traditional bank.

Choice of bank historically has been one of the lower priority things people have to worry about. I think this changes now.

If your personal bank went out of business through no fault or gain of your own, most individuals would feel that it would be fair for you as the depositor should be made whole. That's the same with a business, and as important since this represents the payrolls of thousands of people.

As an individual, I am keenly aware of deposit insurance - it’s much lower where I live, in Canada - and as such it’s common to spread your savings among multiple banking institutions to ensure you are covered (and to remove risk where any individual bank is impacted, even temporarily).

Are consumers smart for doing that? Or are they dumb for even bothering, since it sounds like they should expect to be made whole regardless? Should consumer deposits not benefit similarly if these SVB corporate deposits are made whole? What dollar limit would you recommend the FDIC or CDIC (Canada) insure going forward?

(I ask because you comment on YC asking to advance banking regulation elsewhere in this thread, and I’m wondering what a good number should be going forward. Like, should the insured amount be $10mm, or $50mm, or what?)

> If your personal bank went out of business through no fault or gain of your own, most individuals would feel that it would be fair for you as the depositor should be made whole.

But at the same time, you are also aware of the limits of your protection. If you leave all but $250k uncovered, you're willingly and knowingly taking a risk.

How is it fair to ask a bunch of people who had nothing to do with any of this to make the depositors whole from a risk those depositors willingly took? I really don't understand the ethical stance here.

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