If you had >250k in SVB and you managed to get it out before it was shut down, you'd be pretty happy with yourself right now. If you run a business and have an obligation to share-holders, it would be negligent not to try this at least.
I can kinda blame them for starting one because they did it so aggressively, but only a bit, because that’s just how internet banking works these days.
I can definitely blame them for demanding the taxpayers make them whole by 9am next business day.
Individual depositors don't need to conspire to reach the conclusion that in a bank run scenario, it is virtually always in each depositor's own best interest to withdraw their money.
The outside view on this situation is: shit happens to blameless people all the time and they mostly just have to cope, no matter how validly they insist on zero responsibility. The depositors are going to be made whole - starting with a lump sum Monday morning, some decent percentage by the end of the week, and almost all within a month. That’s what’s going to happen. “Make the depositors whole on Monday morning or the whole banking system goes under” is profoundly off-putting. It’s not because the outside view wants you to lose all your money, it’s because it looks like “getting a little back now, enough back soon, and most back eventually“ isn’t enough, you want to get it all back now. The outside view does not buy your claim of contagion because SVB looks like a weird and insular bank for a weird and insular group of buddy-companies, so it feels like you’re cynically doom-mongering to get what you want, and they already think what you want is too much (and especially too quick).
I’m not espousing these views, I’m trying to see all sides and get all sides seen. That’s how outsiders will see it, and they’ll probably be less polite about letting you know too.
This is akin to blaming a patient for medical malpractice — "why didn't the patient choose a better doctor".
Correct. Thats why they shut SVB down. It is not the government's responsibility to ensure the deposits of every individual depositor.
>This is akin to blaming
There is no blame. The depostors money is lost*. That is a fact, an event that already occurred.
>why didn't the patient choose a better doctor
Just like with a hospital, they can sue SVB (well, not anymore). Some things just aren't fair. But "thing not being fair" does not mean "and now the government shall make it fair."
The law has always been $250K (or some other limit) since the FDIC was created, hundreds (thousands?) of banks have failed since, and sometimes the depositors were burned. Somehow VCs think they are special because they are "disruptive" or whatever but they are not. The other times depositors were burned it wasn't because it was their "fault" or not, that isn't part of the consideration.
*or some amount of it.
When and how much money is returned is going to make the difference between life and death for some of these companies. And the difference between having a job and healthcare or not for a lot of people.
Don’t forget that this is happening to depositors / companies after weathering a pandemic and in a really shitty economies where things are already very challenging. Having additional cash flow problems and/or additional debt to service all the sudden may be the proverbial straw that sends companies and people into bankruptcy.
By this evening you’ll know if a sale has gone through; if so, everything is back to normal. Otherwise, the FDIC has 250k waiting for your employer on Monday morning, guaranteed. Even if that’s not a week’s payroll, for all but the largest companies that’s enough to get employees by for a week.
The money isn’t gone, just locked up in securities. By the end of the week some percentage of the account will be released - I’ve heard predictions of 80%, 60%, 50%, but even if it’s 20% that is still enough for almost any place to run close to full payroll and operating costs for a month. By the end of the month you’ll have 50-80% back, and you’re back to normality. Maybe the last 20% takes a year. It can wait. This isn’t the end! It’s scary, but it is not the end.
They didn't "conspire", per se. But they failed to do due diligence on the nature of the financial institution they were relying upon.
Or even to think, for a minute, about fussy terminology like "FDIC insured" actually means.