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Comment by ineedasername | Hacker News Reader

Seems like yet another example of a disaster that (might) have been avoided if congress, in 2018, hadn't rolled back pieces of Dodd-Frank. Before that, banks with > $50B had to take stronger precautions, but that limit was raised in 2018 to $250B. FRB had assets around $220B.

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No bank in existence could handle losing 40% of their deposits in a few days. You can't possibly protect against that while also operating the business of being a bank as we think of it.

Would people panic & withdraw their deposits if the bank had been more cautious? That's the main question. It can't really be proven either way, but it seems fairly plausible that a bank with much less risk would have far fewer panicked depositors.

Doubtful, as 99% of people aren't taking a detailed look at the bank's risk profile when they're deciding to withdraw their cash. It's a knee-jerk reaction to keep their money safe. After all, FR was actually safe, had their not been a run.

In FR's case, 63-68% (I can't remember the exact number) of all accounts that withdrew were over the 250k limit.

FDIC is not a "Limit up to $250k", it's "At least $250k", and the FDIC has in all cases made accountholders whole even past $250k.

That is an unreasonable assumption for a company that has their payroll in an account for instance. It would be idiotic not to move it.

It is also amazing that is you look at the deposit numbers, almost none of the FDIC protected money moved, whereas almost all of the non-FDIC money went elsewhere.

Maybe they erred in allowing all that FDIC uninsured money, but somebody would have to!

Sounds like the people that could, stayed, while the ones who couldn't take the risk left. I'm a FR client and kept my money in because I'm under the limit. I wouldn't blame anyone who was over the limit for leaving.

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