"Now, SVB, loaded with money, could have tried loaning it like crazy" It couldn't because that's not how banks works. Banks create deposits by making loans. W

"Now, SVB, loaded with money, could have tried loaning it like crazy" It couldn't because that's not how banks works. Banks create deposits by making loans. When external deposits show up, they show up with the equivalent loan already - to the central bank in the shape of banking reserves. What SVB did, foolishly, was to do a floating to fixed exchange at probably the worst possible time and at too high a price. Once a bank's income drops below that required to fulfil its cash letter with the Fed (ie pay the rate of the lender of last resort), it is finished. Hence the FDIC resolution once the cheap money went out the door. Vulnerability to a bank run comes from not being able to pay the going rate at the Fed.