4 ms·

That stinks, and I feel for them. Let's hope people will learn a lesson from this - never keep all your eggs in one basket.

fbdab103 4y ago
Aren't we talking about hundreds of millions/billions of dollars? At that scale, not a lot of baskets available.
- throwing_away 4y ago
  Could a tech company have split their accounts into separate $250k accounts? I'm not sure if the bank would offer that.
  - x3n0ph3n3 4y ago
    No, FDIC insurance applies to account owners, not accounts. Fun fact, if you're married, you can actually turn that into 3 * FDIC insurance limit. - Account 1: You - Account 2: Your spouse - Account 3: Jointly you and your spouse
    - paulclinger 4y ago
      Even more: single, joint, retirement, revocable and irrevocable trust accounts all fall into different categories and are insured independently for each account owner in each bank (the joint account is 250k for all co-owners): https://www.fdic.gov/resources/deposit-insurance/financial-products-insured/ https://www.fdic.gov/resources/deposit-insurance/financial-p...
    - edulix 4y ago
      Or you could hold short-term t-bills for any extra money over the FDIC insurance limit. Then you are good unless the US Gov goes bankrupt, which is a non-zero risk but much lower and different.
      - tome 4y ago
        Yes, I don’t understand what systemic forces are making this not the standard practice.
        phone8675309 4y ago
        SVB and its depositors most likely felt that SVB was too big to fail and that the government would just bail them out
  - quesera 4y ago
    You'd need to split across multiple banks. This can be done manually, with some logistical challenges. This can also be done automatically, e.g. via CDARS.
otikik 4y ago
What about this other lesson: bankers need to be punished harder.
- youngtaff 4y ago
  Or perhaps the other lesson is VCs shouldn’t create a run on the bank they holds their funds and the companies they invest in funds
- phone8675309 4y ago
  We don't punish bankers in this country.

fbdab103 4y ago

Aren't we talking about hundreds of millions/billions of dollars? At that scale, not a lot of baskets available.

throwing_away 4y ago
Could a tech company have split their accounts into separate $250k accounts? I'm not sure if the bank would offer that.
- x3n0ph3n3 4y ago
  No, FDIC insurance applies to account owners, not accounts. Fun fact, if you're married, you can actually turn that into 3 * FDIC insurance limit. - Account 1: You - Account 2: Your spouse - Account 3: Jointly you and your spouse
  - paulclinger 4y ago
    Even more: single, joint, retirement, revocable and irrevocable trust accounts all fall into different categories and are insured independently for each account owner in each bank (the joint account is 250k for all co-owners): https://www.fdic.gov/resources/deposit-insurance/financial-products-insured/ https://www.fdic.gov/resources/deposit-insurance/financial-p...
  - edulix 4y ago
    Or you could hold short-term t-bills for any extra money over the FDIC insurance limit. Then you are good unless the US Gov goes bankrupt, which is a non-zero risk but much lower and different.
    - tome 4y ago
      Yes, I don’t understand what systemic forces are making this not the standard practice.
      - phone8675309 4y ago
        SVB and its depositors most likely felt that SVB was too big to fail and that the government would just bail them out
- quesera 4y ago
  You'd need to split across multiple banks. This can be done manually, with some logistical challenges. This can also be done automatically, e.g. via CDARS.

otikik 4y ago

What about this other lesson: bankers need to be punished harder.

youngtaff 4y ago
Or perhaps the other lesson is VCs shouldn’t create a run on the bank they holds their funds and the companies they invest in funds
phone8675309 4y ago
We don't punish bankers in this country.