$250,000 is safe. Ya'll are apparently intelligent people. You can read the most basic fine print.
Account holders should have their 250k covered and not a cent more unless the owners/shareholders of SVB foot the bill.
In any case, this is a failure of government regulation. If the FAA started allowing cheaper flights on aircraft that had less stringent maintenance standards but let passengers know that it was "at your own risk," then I would question the FAA and the airline industry, not the passengers opting for the cheaper flight.
The $250k FDIC limit on accounts with hundreds of millions of dollars is ridiculous and doesn't sufficiently protect the financial system. That is the regulator's and Congress's responsibility to provide better governance. That a bank like SVB was allowed to exist, with its client base highly concentrated in one very particular industry sector, is also a governance failure.
A startup company's bank account, where it holds VC investment cash and pays out salaries and invoices from, is not something that should experience occasional random disasters where the bank suddenly disappears into a thin air along with your US dollars. This is like a major transportation or industrial disaster, punishing the victims (depositors in this case) doesn't make sense. The focus should be on making the planes, trains or bank accounts safer of future users while compensating the victims of disasters and building trust in industries and regulators. Due to the unique nature of banking, punishing the victim also risks cause the phenomenon of bank runs to spread to other banks and causing further disasters at a time when the economic situation is fragile to begin with.
Curious about why the bankers are getting such ire. Is there a good article describing where negligence kicked in to cause this? Because from what I can tell in my very limited understanding of this situation, they bought very safe bonds that just so happened to be exactly the wrong thing given what happened in the ensuing years.
Why do we allow these people to profit off the gains of their successful bets while socializing their losses?
The pitchforks are coming out at some point. "Gradually, then suddenly."
That Hemingway quote feels very relevant lately.
They made a bet on 10-year government bonds. It didn't work out due to rising interest rates. Whoops? Not my fucking problem. Unless they get their way and make us all pay for it.
Edit: This account is shadow-banned. I can't directly respond to the comment below. Luckily for me, I already thoroughly explained my point. This has nothing to do with "bankers" and everything to do with unbelievable hypocrisy from the SV founder & investor class. You all are so fucking full of shit. Flag this comment, please. After being totally swindled in 2008, I predict Americans are going to react to this rationally, which will be very bad for you. Good luck assholes.
Iirc the rap group Geto Boys has a (great) song "We don't talk to police" about how they don't cooperate with law enforcement, and then got rightfully made fun of when they screamed about people downloading their music and demanded someone do something. The G-Code doesn't extend very far apparently, and that holds for VCs as well
If we don't wake up to a situation on Monday morning where every SVB depositor has been somehow promised that they'll made whole, then the Fed will be repeating the exact same experiment it tried when it allowed Lehman Brothers to fail. The lesson from that little episode was that if you allow the first bank to fail instead of bailing it out, then you'll set off a chain reaction where you'll be forced to bail out multiple banks instead of just ones and your economy will be left a smoking ruin as a result.
In reality, they are total grifters who will milk the general public for every dime they can get.
!remind me 6 months
Seems like a Chase or even a major investment bank that wants relationships with those companies that may eventually IPO could take a short term financial hit and still easily come out on top in the medium-long term.
