Re:Yellen says government will help SVB depositors but rules...
by grugagag on Sunday March 12, 2023 @12:43PM
(#35122399)
Apparently they did that on purpose to be better able get a view on the activity of the money they poured in. Someone on a different thread is pointing to the levers VCs had in SVB for this exact purpose.
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Re:Yellen says government will help SVB depositors but rules...
by rmilk on Sunday March 12, 2023 @01:20PM
(#35122986)
Exactly. If you’re forced to use SVB because of your founders, you don’t have a recourse on the bank.
But there is also a risk question that companies are responsible for that I see is glossed over. No, you shouldn’t have to spread your business accounts to limit them to 250k. But you must know it’s not insured above this, just like a money market account is not a guaranteed rate of return or even guaranteed against capital loss.
I’m just spitballing, but for example what was the rate on a “money market” checking at SVB versus other larger national banks? If it was much higher, it immediately indicates higher risk in a business checking account at SVB to get those rates. You can see this way back with the old junk bond / Lincoln Savings fiasco of the 1980s, or with 2008 MBS, or CD accounts in early 2000s.