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Comment by bradleyjg | Hacker News Reader

Bailing out the depositors is still a bailout.

I don't agree. Depositors aren't necessarily at risk of bankruptcy/collapse. Depositors wouldn't be bailed out. Depositors would be made whole.

SIVB is 100% at risk of bankruptcy/collapse. Saving SIVB would be a bailout for sure.

It’s an insurance payout, not a bailout. If someone totals my car the insurance doesn’t say “well, that’s the risk of owning a car” and pay nothing. Insurance exists for these scenarios.

The insurance had an explicit policy limit. That’s what the premiums were based on.

Up to $250k per depositor isn’t a bailout. A penny above that is.

Depends where the money is coming from. SVB has lots of assets — clearly not enough cash on hand for a bank run but they have lots of assets. Once those are liquidized depositors should get as much of their fair share as possible.

It's likely SVB has assets in excess of $250k per account. So if they are sold, I'd expect depositors to get at least $250k and possibly more, depending on how those assets are sold.

It only becomes a bailout if the government pays beyond the sale of svb's assets.

Yep, we are on the same page. No issue with an orderly, open market asset sale and pro rata distribution. That’s how the system is supposed to work.

Tautology

The only depositors at risk at startups. All regular people are made whole. And they are getting ~50% of their holdings in the next week. Why are VCs clambering for a bailout? The system works as designed. No need to do anything else above and beyond.

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