There’s nothing unique about SVB - and their customer makeup was only obliquely related to this failure. The “high risk” nature of their customers had nothing to do with why the bank failed. Letting depositors lose money here would send a signal that any bank smaller than something like B of A is at risk.

Funny you mention BofA. They have $116 billion in unrealized losses. What all these banks are doing is very typical. If you've ever worked in the industry, you would know that.

https://twitter.com/zerohedge/status/1634025141540732934

http://www.brooock.com/a/svb-collapse-exposes-cracks-in-econ...

I work in treasury and need to find a safe place for $150M in cash… there’s no universe in which I’ll spread that across $250k tranches in hundreds of other banks, so in your vast experience in the matter that’s evident from your confidence here, what would you recommend we do?

When did I ever say that you should do that? We know that the government will backstop BofA. They aren't going to backstop SVB. FDIC is only intended for regular people as you imply.

It seems like there should be an API for this problem...

There kind of is - formerly called CDARS, but it goes by IntraFi now. You establish a “home” bank and they dump your balance into their network and they set up the hundreds or thousands of other accounts. It’s dumb and expensive and shouldn’t be necessary..

https://www.intrafinetworkdeposits.com/