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Comment by Jabbles | Hacker News Reader

One of the key components of a bailout is that the company still exists. In this case, the company does not exist any more, and all shareholders have lost their stock.

So whilst there may be some superficial appearance of a bailout (and we don't yet know how much that is, as we don't actually know the value of the assets that are recoverable), it is inaccurate to say that this is "100% a bailout".

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I'm talking about the uninsured depositors. Who are first in line after the DINBoSC liquidates SVB's assets. And it doesn't matter what actually shakes out in the end; even if some miracle occurred and the FDIC convinced some other bank to buy out the rubble of SVB, or they managed to sell off SVB's assets without taking a loss (virtually impossible), that does not change whether or not this was a bailout.

Because before any of that was announced, the FDIC and Treasury said that no matter what, they will guarantee uninsured depositors will be made whole. That is not what the rules are, those depositors are getting special treatment not afforded to anyone else. They gambled (and most apparently didn't know it), lost, and the FDIC are going to make sure they don't take a haircut.

It's been fun watching the special pleaders redefine "bailout", as if the term could only apply to equity or bonds.

It can apply to any interested party. As in "The depositors were bailed out".

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