The same situation applies at nearly EVERY bank at nearly EVERY time. This is Fractional Reserve Banking [0]. There are almost NEVER enough immediately availa

The same situation applies at nearly EVERY bank at nearly EVERY time. This is Fractional Reserve Banking [0]. There are almost NEVER enough immediately available liquid assets to survive a bank run. Deposits are the inventory of a bank. They then hold a small fraction in reserve, while loaning out many times that value. They can also have other assets. The TOTAL VALUE of all the assets is usually greater than the liabilities, which is the deposits, i.e., the bank is solvent. That does NOT mean that the same fully solvent bank could immediately cash out those assets at full value to meet a surge in withdrawal demands. Take any bank, both most solvent and with greatest liquidity. If we had enough clout to start enough insolvency rumors that we can precipitate a big run on Monday, they'll be shut down by Tuesday. All you need is a big enough "megaphone". Once it starts, it is self-reinforcing, because only those who pull their deposits early get anything. Thiel had exactly such a megaphone, on a bank with assets and deposits highly concentrated in his industry. It is entirely possible, even likely that SVB would be open right now if Thiel had not openly made that call. We do not have anything near enough information to claim that it was "totally justified", and it may in fact turn out that it was entirely unjustified and created a rapidly self-fulling prophecy. You can have a huge pile of tinder with gasoline on it, but without anyone actually lighting a match to it, it could be disassembled and made safe. But as soon at that lit match is tossed, it's done. [0] https://www.investopedia.com/terms/f/fractionalreservebanking.asp https://www.investopedia.com/terms/f/fractionalreservebankin...