Yes, that is the letter of the law. The intent, given that the FDIC emerged from the Great Depression, is to prevent bank runs. Most banks with a large retail

Yes, that is the letter of the law. The intent, given that the FDIC emerged from the Great Depression, is to prevent bank runs. Most banks with a large retail deposit base are immune from bank runs. SVB is unique in that it didn’t have a large retail deposit base yet also had a bimodal customer distribution (financially sophisticated VCs and later-stage startups/enterprises and early stage startups which have the financial sophistication of your local auto mechanic). No acquiring bank will want to touch SVB because of its lack of retail deposits - the risk of account holders fleeing at the earliest opportunity is very high. That forecloses one of the FDIC’s main tools for resolving a bank collapse - especially one of this magnitude. So we have a very unique situation here: a large mostly commercial bank that, unlike most large commercial banks, has a bunch of mom-and-pop level customers. I don’t know what the solution is, but hopefully it will go in the direction of minimizing impact on these small businesses.