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Comment by yeahsure22 | Hacker News Reader

Why do the rules keep changing after the game has been played? And why does it seem to always favor people who are already wealthy beyond imagination? The rules were 250k insured. If you had excess deposits, additional coverage could easily be purchased.

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I am not sure why you think the 250k limit is the end of the road in what is an extremely complex process. The 250k is so that depositors can be paid out quickly while the rest of the process gets going, which could take months or years.

In SVBs case the 250k payouts will only account for 5% of the deposits. SVBs assets, while hampered, are still substantial. What do you propose is done with those assets?

This is what will be done:

“The FDIC will pay uninsured depositors an advance dividend within the next week. Uninsured depositors will receive a receivership certificate for the remaining amount of their uninsured funds. As the FDIC sells the assets of Silicon Valley Bank, future dividend payments may be made to uninsured depositors.”

How were these “the rules?” The FDIC’s job is to make the bank’s customers as close to whole as possible. Where would the bank’s assets go otherwise?

No one who knows what they're talking about is objecting to the bank's remaining assets being distributed between depositors. But there's talk of taxpayer money being used to make depositors 100% whole regardless of how many assets remain, and I think that's where the controversy is.

Everyone has always known that $250k is the max that's guaranteed to be given back to you, and the idea of the government paying back more out of taxpayer funds because a lot of VCs gave their startups bad advice rubs people wrong.

Who’s talking about using taxpayer money?

Y Combinator, in their petition, says that they want at least small business depositors to be made completely whole, without any caveats about how many assets are left. The only way this works is with taxpayer funds.

> Small business depositors at Silicon Valley Bank should be made whole. Regulators need to conduct a backstop of depositors.

https://www.ycombinator.com/blog/urgent-sign-the-petition-no...

@jason , @sama , the current CEO of YC, a general clusterfuck of some of the richest and most powerful people in the US economy?

Deposits in a bank are not assets that you can pay out to shareholders in bankruptcy. it doesnt matter how you've organized your balance sheet internally, those liabilities come first or you arent a bank.

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