-- two causes -- (1) SVB assumed low interest rates would continue, took risk. (2) 94% of SVB's deposits are uninsured by FDIC (40-50% is typical), meaning th

-- two causes -- (1) SVB assumed low interest rates would continue, took risk. (2) 94% of SVB's deposits are uninsured by FDIC (40-50% is typical), meaning there are big sum deposits that go past $250,000. Customers took some counterparty risk. After the letter came in 1 + 2 -> bank run. -- what happens -- Everyone gets the insured $250k quickly. Rest is stuck for possibly long time. Most of it will be recovered eventually, but some small percentage might be lost. There will be local liquidity crisis in the valley in the order of $50 billion at least, but other banks can give emergency bridge loans against assets stuck in SVB once they figure out how much they are worth. "The mood" of the market is ruined. Risk analysis tightens. Some other wheels may drop.