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Comment by tomato_123 | Hacker News Reader

Empathy is completely irrelevant. You agreed to a particular financial contract, one that ended up being a mistake ex-post. Now you want to wind back the clock and pretend you agreed to a different contract, and leave other people on the hook for it.

"Well, if you want to see startups solving hard technical problems we need to have some real talk about how that has to be structured financially"

There are deep, functioning, financial markets. Private buyers were already making offers to buy uninsured deposits at a discount. The world wasn't going to implode. Equity holders and founders were going to take a haircut. That's fine, that's equity's job here. Don't try to get out of it when shit hits the fan.

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Putting your series A check into a fucking bank isn’t a risky financial strategy.

Speaking of private markets, they should have bid higher. Instead the government won and will likely come out ahead with their arrangement. No taxpayer money is being spent.

Sounds like you’re just bitter about tech/biotech companies surviving?

"Putting your series A check into a fucking bank isn’t a risky financial strategy."

You still think that's true? Clearly it is a risk. And that risk can and should be managed. Even now!

There is no law that says the FDIC has to pay uninsured depositors of the next failed bank.

What if you banked with one of the last several failed banks that no one heard of or cared about?

You think no companies split their funds among several banks and short-term US treasury instruments?

Those companies didn't worry about closing this weekend.

No, storing everything in one account at one institution is a risky strategy. You're conflating what you want (something without risk), with something that fundamentally has risk anyways. You take a risk anytime you decide to do something with money, whether that's storing it under a mattress, giving you wallet to your kids, investing in a 401k, or putting money in a bank. There fundamentally is no such thing as a risk free investment when it comes to money. Even treasury bonds have risk to them, especially speaking in real terms.

You're talking about financial risk like it's physics. Consider that financial risk is a psychological tool we invented to balance human behavior and we can reshape the tool whenever we want.

If you can consider that perspective, think about the activities we want to incentivize vs disincentivize in helping us decide when we _should_ reshape that tool.

Are simple bank deposits really something we want people to feel shaky about now and in the future??

> Are simple bank deposits really something we want people to feel shaky about now and in the future??

There is a strong argument for "yes": it will cause people to consider their (now extant) alternatives and some fraction of those people will choose something else, loosening the stranglehold that retail banking has on routine business transactions.

And what are the less risky alternatives to having money in a bank? Fucking Bitcoin?

Using a narrow/full reserve bank.

The Fed has gone out of its way several times to ban full reserve and narrow banks from ever getting access to Fed reserves.

No, normal bitcoin. It doesn't take much to be less risky than "you might have all of it frozen at any time by factors wholly outside of your control".

Or Ether. Or DAI. Or USDC if that's your risk appetite (the diversification of the storage of which is abstracted away already, as you will note it has regained its peg before SVB even reopened under FDIC management). Or a lot of other choices that present themselves.

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