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It was a great deal for VCs, and also a great deal for politicians who are connected with startups, and a great deal for startups as well (they had the high f

• jeffbee 3y ago
  It’s paid by banks so it is a loss for all bank account holders, a broader group than taxpayers.
  • s1artibartfast 3y ago
    Alternatively, you could look at it as a loss for Bank shareholders which is a much smaller group or a loss that falls predominantly on large account holders. Let's not pretend that a student with $20 in their bank account is paying as much towards FDIC insurance a multinational with a billion dollar account
    • pessimizer 3y ago
      Billion dollar accounts don't pay anything towards FDIC insurance for they are not insured by the FDIC. Someone who has $20 in their bank account is obviously paying more.
      • s1artibartfast 3y ago
        What do you base that on? Banks pay the insurance. Do you think a bank makes more off of $20 account than a billion dollar account?
      • butlerm 3y ago
        Under current law FDIC member banks pay assessments on their total liabilities, which include uninsured deposits. Account holders do not directly pay anything for deposit insurance, and what they do pay is largely in the form of lower interest. The only thing worth paying for would be paying a bank custodial fees so they do not lend out your deposits to anyone. Otherwise it is the banks responsibility to insure funds that they are allowed to legally lend to others, to make good on the very idea of a deposit (as opposed to a loan) in the first place.
• resters 3y ago
  It's a loss for everyone who had bet against the market in general as well
• borski 3y ago
  Plenty of people who were not VCs or politicians banked with SVB. It was a huge bank.
  • ke88y 3y ago
    Sure, but FDIC suffices for most normal people. If you add up all the dollars over $250K in each SVB account, it's going to be overwhelmingly VCs and their set who benefited.
    • borski 3y ago
      No, it isn’t. Small business owners, for example, also have assets often greater than $250k, as do engineers in the valley, as do tech startups, as do franchisees, etc.
      • ke88y 3y ago
        That can be spread out across multiple institutions and ownership categories. Your engineer example is particularly silly. In a country with 4000 banks, there is absolutely no reason -- other than pure laziness or stupidity -- for an engineer's personal assets in checking/savings/MM/CD accounts to exceed FDIC insurance limits on any particular ownership category at any particular institution. Ie, it's not $250K of total liquid assets. It's $250K, per ownership category, per institution, and there are at least 4,000 and up to 32,000 institution+category pairs depending on your situation. So between $1,000,000,000 and $8,000,000,000 of coverage is hypothetically possible per natural person, and at least several millions is pretty trivial. Source: I have more than $250K in FDIC insured accounts and it's all covered by FDIC and all of that cash is even held at the same institution (in different categories)! This isn't rocket science. But you do have to pay your FDIC premiums, and call me a Rugged Individualist, but I don't think we should give rich VCs and tech founders free post facto insurance. I know, I know, rugged individualism and responsibility is only for the poors. It's our job to bail out rich asshole VC bro, finance bro, and tech founder parasites.
    • s1artibartfast 3y ago
      Why does it matter? If you add up all the dollars, it was overwhelmingly the VCs paying the FDIC insurance.
• dehrmann 3y ago
  > they had the high fixed-rate deposit Did they? It wasn't the comedically low variable rates banks usually pay?
  • borski 3y ago
    It was. This is nonsense. SVB was not a high yield bank like Ally or others.
    • rvnx 3y ago
      It was high at the time. The reason for their demise is precisely because they invested into long-maturity bonds, ignoring the fact that customers may want, someday, to get their money back in the short-term. They chose these long-maturity bonds is because they were offering higher yields. Now of course, seen from today, these yields are very small, but when they invested, it was at a time we were talking about zero or negative yields in many currencies. It's like they risked it all, to get 2%. cf. https://twitter.com/debarghya_das/status/1634021769656016896 https://twitter.com/debarghya_das/status/1634021769656016896
      • taeric 3y ago
        I think you missed pronouns on this. The "it" was the interest they were paying to depositors. Which... is typically absurdly low. I don't have a reference on what the accounts paid out, but this has nothing to do with the assets that SVB held, but the liabilities they had to their depositors. I'd be delighted to see what their accounts were offering.
        • FireBeyond 3y ago
          4.91% on a standard deposit account up to $4M. Most of us, earning sub 1% in 2022 (and often down to 0.1%) would argue that SVB absolutely was not "not high yield" like the grandparent comment.
          • taeric 3y ago