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The depositors were largely those with means to manage risk but not doing so. Surely you mean you're happy for the workers, clients, contractors, etc., not the

The depositors were largely those with means to manage risk but not doing so. Surely you mean you're happy for the workers, clients, contractors, etc., not the depositors? Right? The backstop was sold on the backs of those people, and if they're not the overwhelming beneficiary it means the depositors might not have been totally honest with us about their motives!

kgwgk 4y ago
> Surely you mean you're happy for the workers, clients, contractors, etc., not the depositors? Why would anyone be happy for the workers of a bank that won't exist anymore in any form once the liquidation is sorted out? [Edit: Nevermind, my dumbass didn't understand that those were the workers of the depositors, the clients of the depositors, etc.]
- deleted 4y ago
  [deleted]
- JamisonM 4y ago
  You could be happy for most of the workers of the bank too... it is not like the tellers and loans officers were managing the systemic risk of the bank! I am happy for them if they have jobs tomorrow if they were doing their jobs well given that we know that the C-suite and board were screwing stuff up.
  - kgwgk 4y ago
    The point was that they won't have a job soon. To be fair maybe some activities may still be sold to third parties - I have no idea.
    - JamisonM 4y ago
      That wasn't the point and also they will still have jobs because by in large SVB will continue operations.
      - kgwgk 4y ago
        Are you telling me what was _my_ point when I asked why would anyone be happy for the workers of a bank that won't exist anymore in any form once the liquidation is sorted out? What makes you say that SVB will continue operations? SVB will cease to exist: it's being liquidated.
        JamisonM 4y ago
        > SVB will cease to exist: it's being liquidated This isn't like when Best Buy went bankrupt, the banking operations will continue, the branches will still run. It will take a long time to absorb SVB's operations into a larger entity, the larger entity may choose to run them as a subsidiary. You are making assumptions about the operations and staff based on no information, if SVB is going to be open for services on Monday as the regulator has promised everybody will have to show up for work.
        kgwgk 4y ago
        > if SVB is going to be open for services on Monday as the regulator has promised What do you think that the regulator has promised exactly? The only promise I see is that people will be able to access all their money at the Deposit Insurance National Bank of Santa Clara (DINB).
        JamisonM 4y ago
        "Silicon Valley Bank had 17 branches in California and Massachusetts. The main office and all branches of Silicon Valley Bank will reopen on Monday, March 13, 2023. The DINB will maintain Silicon Valley Bank’s normal business hours. Banking activities will resume no later than Monday, March 13, including on-line banking and other services. Silicon Valley Bank’s official checks will continue to clear. Under the Federal Deposit Insurance Act, the FDIC may create a DINB to ensure that customers have continued access to their insured funds." They are running it under a new name. I understand how this can be confusing but they have to keep everything in place so that the systems will all still work and people can get their money, payroll systems, internal systems and processes all still work. And when a buyer for their operations is found it will keep on running and slowly be incorporated into the acquiring entity because it will in effect be a very large bank merger that will take time and effort. https://www.fdic.gov/news/press-releases/2023/pr23016.html https://www.fdic.gov/news/press-releases/2023/pr23016.html
- ummonk 4y ago
  Regarding the workers of SVB itself, I'm not sure what will happen once the receiver process is finished, but for now workers are being given 1.5x pay by the FDIC for staying on. Hopefully they'll be able to stay on afterwards via an acquiring bank.
ghettoimp 4y ago
The depositors did nothing here but put their own money in a bank account? What possible nefarious motive are you implying?
- capableweb 4y ago
  > The depositors did nothing here but put their own money in a bank account? I'm guessing the mistake parent is implying to is that they put more than what was insured, knowing very well the risk that if the bank fail, they might only get back 250K USD, as it's only insured up to that. Well, in theory at least. In practice it seems the insurance was actually a unspecified "unlimited" amount, as they'll get all their funds back now.
- luckylion 4y ago
  Bank offers you very favorable rates for cash, better than competitors. You put lots of cash into bank account, "what could go wrong?" Bank implodes. Federal government bails you out and goes to collect the money to do so from other banks who offered more reasonable rates and thus didn't get your business.
  - jnwatson 4y ago
    They didn't offer interest on their deposits.
    - mikeyouse 4y ago
      Exactly right, these were mostly just people wanting a place to pay vendors and payroll. Millions of dollars in 0% interest checking accounts.
    - rottencupcakes 4y ago
      Can we all just be reasonable here? There is no black and white. SVB clearly offered services that other banks couldn't or wouldn't provide - whether that be loans, credit cards, interest, or anything else. They clearly fought to not be subject to specific regulations that bigger banks were subject to. Was every depositor thinking about all this when choosing their banking decisions or were they just going with the bank their VC recommended? Probably the latter, but there's definitely some wiggle room here.

kgwgk 4y ago

> Surely you mean you're happy for the workers, clients, contractors, etc., not the depositors? Why would anyone be happy for the workers of a bank that won't exist anymore in any form once the liquidation is sorted out? [Edit: Nevermind, my dumbass didn't understand that those were the workers of the depositors, the clients of the depositors, etc.]

deleted 4y ago
[deleted]
JamisonM 4y ago
You could be happy for most of the workers of the bank too... it is not like the tellers and loans officers were managing the systemic risk of the bank! I am happy for them if they have jobs tomorrow if they were doing their jobs well given that we know that the C-suite and board were screwing stuff up.
- kgwgk 4y ago
  The point was that they won't have a job soon. To be fair maybe some activities may still be sold to third parties - I have no idea.
  - JamisonM 4y ago
    That wasn't the point and also they will still have jobs because by in large SVB will continue operations.
    - kgwgk 4y ago
      Are you telling me what was _my_ point when I asked why would anyone be happy for the workers of a bank that won't exist anymore in any form once the liquidation is sorted out? What makes you say that SVB will continue operations? SVB will cease to exist: it's being liquidated.
      - JamisonM 4y ago
        > SVB will cease to exist: it's being liquidated This isn't like when Best Buy went bankrupt, the banking operations will continue, the branches will still run. It will take a long time to absorb SVB's operations into a larger entity, the larger entity may choose to run them as a subsidiary. You are making assumptions about the operations and staff based on no information, if SVB is going to be open for services on Monday as the regulator has promised everybody will have to show up for work.
        kgwgk 4y ago
        > if SVB is going to be open for services on Monday as the regulator has promised What do you think that the regulator has promised exactly? The only promise I see is that people will be able to access all their money at the Deposit Insurance National Bank of Santa Clara (DINB).
        JamisonM 4y ago
        "Silicon Valley Bank had 17 branches in California and Massachusetts. The main office and all branches of Silicon Valley Bank will reopen on Monday, March 13, 2023. The DINB will maintain Silicon Valley Bank’s normal business hours. Banking activities will resume no later than Monday, March 13, including on-line banking and other services. Silicon Valley Bank’s official checks will continue to clear. Under the Federal Deposit Insurance Act, the FDIC may create a DINB to ensure that customers have continued access to their insured funds." They are running it under a new name. I understand how this can be confusing but they have to keep everything in place so that the systems will all still work and people can get their money, payroll systems, internal systems and processes all still work. And when a buyer for their operations is found it will keep on running and slowly be incorporated into the acquiring entity because it will in effect be a very large bank merger that will take time and effort. https://www.fdic.gov/news/press-releases/2023/pr23016.html https://www.fdic.gov/news/press-releases/2023/pr23016.html
ummonk 4y ago
Regarding the workers of SVB itself, I'm not sure what will happen once the receiver process is finished, but for now workers are being given 1.5x pay by the FDIC for staying on. Hopefully they'll be able to stay on afterwards via an acquiring bank.

ghettoimp 4y ago

The depositors did nothing here but put their own money in a bank account? What possible nefarious motive are you implying?

capableweb 4y ago
> The depositors did nothing here but put their own money in a bank account? I'm guessing the mistake parent is implying to is that they put more than what was insured, knowing very well the risk that if the bank fail, they might only get back 250K USD, as it's only insured up to that. Well, in theory at least. In practice it seems the insurance was actually a unspecified "unlimited" amount, as they'll get all their funds back now.
luckylion 4y ago
Bank offers you very favorable rates for cash, better than competitors. You put lots of cash into bank account, "what could go wrong?" Bank implodes. Federal government bails you out and goes to collect the money to do so from other banks who offered more reasonable rates and thus didn't get your business.
- jnwatson 4y ago
  They didn't offer interest on their deposits.
  - mikeyouse 4y ago
    Exactly right, these were mostly just people wanting a place to pay vendors and payroll. Millions of dollars in 0% interest checking accounts.
  - rottencupcakes 4y ago
    Can we all just be reasonable here? There is no black and white. SVB clearly offered services that other banks couldn't or wouldn't provide - whether that be loans, credit cards, interest, or anything else. They clearly fought to not be subject to specific regulations that bigger banks were subject to. Was every depositor thinking about all this when choosing their banking decisions or were they just going with the bank their VC recommended? Probably the latter, but there's definitely some wiggle room here.