More bailouts now, lead to riskier behaviour in the future.
One with deposits in the bank is a creditor. One with a loan from the bank is a debtor/debitor.
It's better to have more people watching out for danger.
I think about that money again when I want to invest it or when I need it to buy something big. Everything else is ATM and credit card, or equivalent stuff. But getting money from a customer or an employer and automatically adding it to a bank account should not become the same thing as investing in the stocks of that bank. Keeping at least a weekly eye on my bank is too much of a burden. The only thing I do is make sure that my balance is well below the limit the state will pay back to account holders is the bank blows up. That's not difficult.
It would be preferable if the regulatory environment would make sure that you as a depositor have an incentive to hold the bank to account.
Yes, you shouldn't have to keep a weekly look on your bank's soundness. You should be able to outsource that burden easily.
Eg with FDIC gone, private deposit insurance would still be allowed. And of course, journalists would also still be allowed to report on banks. Those stories might have a wider audience than now.
But even your counter can be addressed. Future risk is something that can be addressed once SVB is stablized and contagion contained. On the other hand, unrest following multiple startup blowup is a lot less predictable.
The question becomes: which risk is worse ( potential risky behavior later vs contagion now ). Immediate risk seems worse to Yellen and her friends. I personally disagree, but I have no power over those decisions so I can relatively easily rely on principle. I wish I could claim I would do differently were I in her shoes.
We had exactly the same arguments during the last bailouts. The future of back then is today.