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Comment by duxup | Hacker News Reader

I’m impressed the feds operate so fast.

It would seem they have to, given the sheer amount of ignorance even in these "intelligent" HN threads. Most of this community is seemingly primed to view this as another FTX-style exit scam, when the sheer majority of deposits are in fact still there.

Although I'm not looking forward to the next few weeks when the VC community will be blasting out screeds about how their bank-run-withdrawals shouldn't be subject to clawbacks...

SVB blew up chasing yield with risky assets to juice corporate profits. I haven’t seen people calling it an exit scam, just terrible governance. Not entirely unlike FTX.

Not sure why anyone who withdrew should be subject to clawbacks. What law did the break? SVB caused the bank run, it wasn’t some meme driven panic or coordinated effort.

It's not that people are calling it an exit scam, rather they're talking about uninsured deposits as if they're completely gone. I feel that worry descends straight from cryptocurrency exchanges blowing up, where there is generally no assets left. (I agree I overspoke by calling FTX an "exit scam", when it seems more like gambler's ruin)

AFAIK the FDIC doesn't look kindly on people who liquidate their accounts during a bank run [0]. This has two purposes. First it spreads a smaller amount of pain around to all depositors, rather than a larger amount of pain for some depositors. And second, it discourages bank runs in the first place.

And honestly without the meme behavior SVB might not have collapsed. I don't think talking about holding the bonds to maturity is a great general appraisal of the situation. But on the other hand it seems SVB had lots of depositors that were actually content to park a lot of cash and not chase high yields, so it could have actually worked out if not for the run.

[0] https://news.ycombinator.com/item?id=35097028

FTX wasn't just "terrible governance" it was a straight-up scam. They were illegally using customer deposits in their sister company's trading account. SVB on the other hand had full rights to those funds.

I'm kinda curious what the FDIC will ask of Thiel. From what I understand, the message from him and his fund to their startups for Thursday was "you need to get your money out of SVB and it needs to happen TODAY" sounds "suspiciously specific"...

I honestly haven’t seen anyone make those claims.

They didn't act fast enough to save any of the SVB brand value which is now probably negative. I look forward to the SVB employee Halloween costumes reminiscent of Lehman Brothers in 2008.

Why should they try and save the SVB brand ?

It deserves to be dragged through the gutter for the hubris and incompetence demonstrated by the CEO, CFO etc.

And hopefully a reminder to everyone that they should due diligence on their banks. The fact that they had no CRO and openly lobbied for deregulation should have been major warning signs.

The short answer would be because the SVB brand is essentially owned by the bank's unsecured depositors at this point. You have to balance their recovery against the moral hazards of too earnestly sweeping failure under the rug.

None of that is the FDIC's job.

They could probably brag about being FDIC insured, maybe make the font bold to restore their branding image.

The FDIC is a well-oiled machine.

I imagine the accountants and attorneys and fed bankers parachuting into action, or maybe a bunch of helicopters with music.

You aren't too far off, going by the NPR article in another comment – https://news.ycombinator.com/item?id=35116265

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