Just because they have a lot of money doesn’t mean they have the expertise to evaluate a bank’s inner workings. Although I guess they could have hired people at considerable expense to do that … and I think some of them did which was what exasperated the run when they mass redrew their deposits. That or I think they can buy insurance … that said I wonder how many people/corporations actually buy insurance for their deposits above $250k.
Still my point stands, having depositors drown won’t stop others from pulling another SVB.
I love these metaphors that equate losing money with death. The whole point of capitalism is that people who make good decisions get to become rich and people who make bad ones don't. SV founders believe this at their core; at least they pretend to. No wonder people think it's a total scam the way it's currently implemented.
You seem like you want to ‘stick it’ to these people because they are capitalists lol. You’re saying we should let everyone lost deposits over 250k because they are capitalists? A knowledgable capitalist knows that decreasing trust in banks hurts the economy and lead to less growth, just because you dislike them them and make wild assumptions about what they believe doesn’t mean the US ‘should’ do what you are prescribing.
You shouldn't know how an internal combustion engine works, right? So you bought a shitty truck for you business, it broke (let's say the warranty has expired), now you are broke. A knowledgeable capitalist knows that decreasing trust in vehicles hurts economy, so let's government intervene and compensate you for your broken truck. Right? Or maybe take over Ford/GM so they can build reliable trucks and they don't break, it will be good for economy, right? Banking and choice of banking tools is as important as choosing your truck and it's on you if you call yourself a capitalist, and if you failed, well, blame yourself.
Still my point stands, having depositors drown won’t stop others from pulling another SVB.