4 ms·

Well if everyone didn't just follow everyone else blindly, there wouldn't have been a run

• HDThoreaun 4y ago
  How is pulling money out of an insolvent bank "blindly following?" Everyone could see their deposits were decreasing for over a year and they didn't have the cash to continue to support it, there's nothing blind about following the incentives and making a good decision.
  • slenk 4y ago
    Weren't they technically ok before the run as long as there wasn't a run?
    • HDThoreaun 4y ago
      If deposits kept increasing they might've been ok, but startups had been withdrawing the cash they had raised during the pandemic, deposits were decreasing rapidly before the solvency issues were thought about. At that point there is a very real scenario where the bank runs out of money and depositors are screwed.
      • slenk 4y ago
        I feel like if it were slower though, then the bank would have been fine. Granted, I can't talk about the board or their investing decisions because I don't feel educated enough to speak on that part.
        • hnfong 4y ago
          There's no way to "feel" this, if you can look at items on their balance sheet you can determine whether their assets at fair value covers their outstanding debt of not. IF it doesn't, it's likely the bank would break sooner or later, if there was no bank run, it would have died a slow and painful death anyway (or, more likely, somebody would try to make risky bets in attempt to recover). There hasn't been a buyer yet, which indicates the perhaps the assets aren't that great.