If the lesson you want corporate depositors to learn is that in the United States, any dollar beyond 250K in an account can evaporate overnight, than be prepared for a lot more bank runs in the immediate future.

The lesson is to mitigate this risk with insurance, account structures and other things.

I think the lesson is also don’t bank with banks doing shady, dumb things. And that’s a valuable lesson that people with over $250k should already know and not need to be taught.

What did SVB do that was shady and dumb?

Looked into it further, they didn't really do anything shady, but they did fail to hedge their interest rate risk with swaps, which is dumb.

> any dollar beyond 250K in an account can evaporate overnight

Yes. A decade and a half from a once-in-a-century financial crisis and we’ve already forgotten this. Corporate treasury best practices aren’t done for fun, they’re done because these are real risks.

Being at the top of the line in bankruptcy proceedings is the law. So they shouldn't be generally subject to lessons from the government that go beyond that...

Nobody is saying that depositors shouldn't be at the top of the line. They're saying that if there's not enough money to pay back even them, the goverment shouldn't jump in to make up the shortfall (beyond the $250K it has insured).

parent comment is in response to OC laying out the standard payment schedule for bankruptcy proceedings...

Because the bank has more than enough assets to payback at least 70-80%. Are you suggesting that money should be appropriated by someone just to teach them a lesson?

No, but I understand the phrase “be made whole” to mean that depositors should not face the risk of losing that 20-30%. They should take some “hit” as OP put it above.

And then other companies will start withdrawing their cash from a bunch of other regional banks crashing the whole banking system..

So no I don’t think they should take “some hit”.