Re:The Collapse of SVB Exposes the Largest Crack in the Economy
by boppo1 on Friday March 10, 2023 @11:09PM
(#35105213)
97% of depositors exceeded the FDIC limit.
Re:The Collapse of SVB Exposes the Largest Crack in the Economy
by phone8675309 on Friday March 10, 2023 @11:57PM
(#35105520)
That stinks, and I feel for them. Let's hope people will learn a lesson from this - never keep all your eggs in one basket.
Re:The Collapse of SVB Exposes the Largest Crack in the Economy
by fbdab103 on Saturday March 11, 2023 @12:34AM
(#35105744)
Aren't we talking about hundreds of millions/billions of dollars? At that scale, not a lot of baskets available.
Re:The Collapse of SVB Exposes the Largest Crack in the Economy
by throwing_away on Saturday March 11, 2023 @12:48AM
(#35105835)
Could a tech company have split their accounts into separate $250k accounts? I'm not sure if the bank would offer that.
Re:The Collapse of SVB Exposes the Largest Crack in the Economy
by quesera on Saturday March 11, 2023 @01:16AM
(#35105962)
You'd need to split across multiple banks.
This can be done manually, with some logistical challenges.
This can also be done automatically, e.g. via CDARS.
Re:The Collapse of SVB Exposes the Largest Crack in the Economy
by x3n0ph3n3 on Saturday March 11, 2023 @01:02AM
(#35105896)
No, FDIC insurance applies to account owners, not accounts.
Fun fact, if you're married, you can actually turn that into 3 * FDIC insurance limit.
- Account 1: You
- Account 2: Your spouse
- Account 3: Jointly you and your spouse
Re:The Collapse of SVB Exposes the Largest Crack in the Economy
by paulclinger on Saturday March 11, 2023 @02:05AM
(#35106176)
Even more: single, joint, retirement, revocable and irrevocable trust accounts all fall into different categories and are insured independently for each account owner in each bank (the joint account is 250k for all co-owners): https://www.fdic.gov/resources/deposit-insurance/financial-p...
Re:The Collapse of SVB Exposes the Largest Crack in the Economy
by edulix on Saturday March 11, 2023 @02:09AM
(#35106190)
Or you could hold short-term t-bills for any extra money over the FDIC insurance limit. Then you are good unless the US Gov goes bankrupt, which is a non-zero risk but much lower and different.
Re:The Collapse of SVB Exposes the Largest Crack in the Economy
by tome on Saturday March 11, 2023 @05:06AM
(#35106998)
Yes, I don’t understand what systemic forces are making this not the standard practice.
Re:The Collapse of SVB Exposes the Largest Crack in the Economy
by phone8675309 on Saturday March 11, 2023 @05:07PM
(#35113284)
SVB and its depositors most likely felt that SVB was too big to fail and that the government would just bail them out
Re:The Collapse of SVB Exposes the Largest Crack in the Economy
by otikik on Saturday March 11, 2023 @02:22AM
(#35106244)
What about this other lesson: bankers need to be punished harder.
Re:The Collapse of SVB Exposes the Largest Crack in the Economy
by youngtaff on Saturday March 11, 2023 @04:40AM
(#35106881)
Or perhaps the other lesson is VCs shouldn’t create a run on the bank they holds their funds and the companies they invest in funds
Re:The Collapse of SVB Exposes the Largest Crack in the Economy
by phone8675309 on Saturday March 11, 2023 @05:06PM
(#35113278)
We don't punish bankers in this country.
Re:The Collapse of SVB Exposes the Largest Crack in the Economy
by HyperSane on Saturday March 11, 2023 @04:45AM
(#35106904)
Then they should have understood the risk they were taking.
Re:The Collapse of SVB Exposes the Largest Crack in the Economy
by WeylandYutani on Saturday March 11, 2023 @06:50AM
(#35107518)
And chosen a better bank.
Besides common strategy in my country: have more money than 250k spread it around at multiple banks.
SVB was not small, but an order of magnitude smaller than the large money center banks (Citi, BofA, JPMChase).
That being said, nearly every other bank of that size submitted Dodd Frank Stress Test results to the Fed in 2022.
https://www.federalreserve.gov/publications/files/2022-dfast...
Somehow SVB avoided this. I don’t see this as systemic at all. The FDIC will make depositors whole and the owners and managers did a bad job and they lose. The worst possible response would be a bailout of any sort beyond ordinary FDIC receivership.