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Comment by hcknwscommenter | Hacker News Reader

Your take does not seem to reflect reality to me. SVB did not offer particularly attractive interest rates to depositors. No one banked with SVB because of some extra APR on their savings/checking accounts. SVB mismatched interest rate risk and deposit flight risk, bungled a poorly timed asset sale and report thereof, and then compounded the problem with a few silly comments to the public at exactly the wrong time.

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No, they banked there because SVB would throw money at VC's and founders (ski trips, free meals, lines of credit) who in turn would recommend/force their companies to use the bank. For all the talk of being "friendly" and "relationships" thats basically it.

The average american now has to cover the loss, either through eventual taxes, or through passthrough costs from their bank (who will not give them a free meal or ski trip).

The fact that thier motivations were convoluted should not make the tax payer any more on the hook for the consequences.

A disgraceful bailout, if entirely unsurprising.

Shades of "The Times 03/Jan/2009 Chancellor on brink of second bailout for banks".

https://twitter.com/PeterContiBrown/status/16350630127753256...

On some level I don't get this. Ultimately a bank is providing depositors a service. Maybe their interests rates weren't the absolute highest, but they were still solid AND they were able to spend a ton on marketers, engineers, reps etc. to keep clients happy.

Presumably there was a reason so many people choose them. They could have said "hey in order to make sure your money is safe we are actually going to offer a slate of services on par with our competitors" but instead they said "we are going to offer a slate of services equal or better than our competitors in every category"

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