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Comment by neom | Hacker News Reader

The run started earlier in the week, msg's to moving money out were going on long before Thursday. Who originally triggered it, no clue... but in a bank run, those who run first make it out the door. You're not exactly taking your fiduciary responsibility seriously by thinking "oh it's probably fine! I'm sure everyone else will stay level headed and keep their money in this bank that seems to be falling over" - The FDIC in theory should to step in prior to the run, take over the bank and prevent it, they did a good job of that in many instances in 2008, not sure what happened here. It's been mentioned quite a few times in these threads, but this 60 minutes clip about 2008 is really good: https://www.youtube.com/watch?v=TAE8i40A5uI

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This was the second largest bank failure in US history. The feds stepped in mid day on Friday and sorted out the entire situation by Sunday evening. And your takeaway is that the government was too slow to react and are to blame for this?

I wasn't trying to be critical of the FDIC, they're obviously really excellent at their job and it's a testament to just how down pat they have their play book given they did managed to get so much sorted out by Sunday. My only point was they managed to prevent bank runs of failing banks in the past, they have deep insight into the banking system. I'm curious what happened this time. Maybe as you said, it's related to the size of the bank, I don't know.

at this point they've promised to make svb's depositors whole, by levying a special assessment on all other banks if need be

if they had done that 60 hours earlier svb would be fine

Would be fine (an excellent outcome) and under the original ownership and leadership (arguably an undesirable outcome).

I say undesirable because if you believe they had financial troubles that cast genuine doubt on their ability to meet all withdrawals if they were spaced out over a reasonable period (say 24 months), then their management’s ability to run a bank is in question (and the owners who put that management in place should have that ownership at risk).

I don’t know with certainty that the “could meet all withdrawals” test was failed, but it seems that many people who know more finance than I do do believe that.

fair point

This clip is unfortunately not available in Canada.

https://piped.video/watch?v=TAE8i40A5uI

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