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just the depositors that could have bought private insurance.

• slt2021 3y ago
  had these depositors not been made whole - all of them would have rushed through the door to get their money back and park it at Fed/money market funds/TBTF banks/etc - and it would have cause even more bank runs
  • kelnos 3y ago
    Sure, but this is just a further symptom of the problem. Maybe it made sense to do a depositor bailout this time, but I don't see any reasonable structural changes that will prevent this from happening again. Ideally we want no bank runs, confidence in the system, and banks that keep their risk profile low enough that they can survive a big chunk of their depositors deciding to take their money out. What changes have been made since SVB's failure to achieve this? What confidence do we have that another SVB won't happen next year or whenever?
    • slt2021 3y ago
      SVB's failure was in risk management (duration risk mismatch and deposit concentration in tech industry), other banks seem to be fine and well diversified with depositor base. but if people start taking money out of banks and start putting money in fed funds/money market, then these kinda problems will repeat again. but most likely - failing banks will be just acquired by larger competitors, and thats it