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Hopefully sacking everyone is a good deterrent. That said, the vast majority of people don’t need to worry about the $250k limit. But companies do. Should the
by MBCook 4y ago
Hopefully sacking everyone is a good deterrent.
That said, the vast majority of people don’t need to worry about the $250k limit. But companies do.
Should there be a separate limit for business accounts? Or is every business just supposed to juggle dozens+ of accounts if they’re big enough to stay safe?
Roku had $500 million in SVB. That would need 2000 accounts. But even small local business may have to deal with $1-2 million just in savings and payroll and such right?
- deleted 4y ago[deleted]
- krupan 4y agoEven just two or three accounts at different banks would be more prudent and would have prevented the run on SVB that ultimately killed it.
- MBCook 4y agoI think a lot of companies did (Roku for example did). But when basically the entire sector you focus on decides to run, you’re in deep trouble. They just weren’t diversified enough.
- gretch 4y agoBut why is this a desired end state of the world? Does anyone think to themselves, gee, I'm glad Roku, the company that made my TV, is financially prudent enough to open 3 separate bank accounts. TV companies should compete on making the best TV. Not playing some sort of weird financial hedging game on the risk of a bank run.
- krupan 4y agoSorry, but shit happens and so yes, we all need to learn and exercise some financial prudence. "Don't put all your eggs in one basket," is not a "weird financial hedging game," it's common sense.
- dragonwriter 4y ago> Or is every business just supposed to juggle dozens+ of accounts if they’re big enough to stay safe? You don’t need dozens of accounts to diversify against short-term risk, and the long-term risk is pretty low since, while uninsured, even in failures a large fraction of uninsured deposits tend to be returned, and bank failure is still pretty rare (in terms of probability of hitting any given depositor per year.) And, if you do, there are, in fact, businesses you can go to whose entire business is facilitating this.
- fortran77 4y agoWe have, after a lifetime of careful savings, several times the FDIC limit and we don't exceed the limit in any one bank. This is a minor annoyance, but we do it. It's especially important for CDs, etc. I can't imagine anyone taking that risk, but it's typical of the Government to reward people who are less careful than I am.