Only a fraction of deposits will be covered by the FDIC’s insurance fund:

However, what we have here is a liquidity problem. There are longer dated assets that would sell at a haircut if you were forced to sell right now. But if you just held them to maturity, you’d get your money back. Now, who has a lot of short term assets on their balance sheet that could be sold quickly either for profit or at least for face value with no loss? And also have the long term focus to hold SVB’s relatively safer assets to maturity to realize the full value?

Perhaps a 95 cents on the dollar swap could be made to instill a bit of discipline on SVB’s depositors.

Anonymous wrote:It’s huge. This bank is an integral part of the start up/ early stage community. Not to mention the VC landscape.

Not to mention dity oligarch and chinese money.

Anonymous wrote:

Anonymous wrote:I don’t think you all understand what happened. FDIC took over the bank. All FDIC-insured deposits are guaranteed and FDIC will pay a dividend out against non-insured funds. Branches will open as usual on Monday.

For all practical purposes, the bank essentially switched ownership.

Yeah but this is still devastating and not good.

It’s only devastating if it’s indicative of a broader problem, which I’m not sure it is. I think that remains to be seen.

Anonymous wrote:Maybe now is a good tie to revisit why they can't forgive student loans but can think about bailing out a multibillion dollar bank?

Who is “they”? The administration is doing both. SCOTUS is likely to rule against loan forgiveness, but let’s be clear about who “they” is.

Anonymous wrote:I don’t think you all understand what happened. FDIC took over the bank. All FDIC-insured deposits are guaranteed and FDIC will pay a dividend out against non-insured funds. Branches will open as usual on Monday.

For all practical purposes, the bank essentially switched ownership.

Yeah but this is still devastating and not good.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I don’t think you all understand what happened. FDIC took over the bank. All FDIC-insured deposits are guaranteed and FDIC will pay a dividend out against non-insured funds. Branches will open as usual on Monday.

For all practical purposes, the bank essentially switched ownership.

This isn’t a bank for mom and pop. These are startups and VCs, which banked their operating capital at SVB. It was a symbiotic relationship since SVB dabbled in VC as well. But they had balances much bigger than $250k. I thought I read about 90% of funds were not FDIC insured.

Now that doesn’t mean it’s loss, but it means assets are frozen until court bankruptcy is processed, and there will be a haircut for what is recovered.

Customers will get a dividend against uninsured funds within about the next week. That’s according to the FDIC’s announcement.

Well as long as dividend payments match their capital needs that will help.

The reason these companies banked with SVB to begin with is that they burn huge amounts of cash. Reality is there is going to be a lot of orgs that already have more than 250K due out between now and early next week. Cash is their lifeblood and its going to be hard to hold one of these businesses together even for a few days without access to operating funds.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I don’t think you all understand what happened. FDIC took over the bank. All FDIC-insured deposits are guaranteed and FDIC will pay a dividend out against non-insured funds. Branches will open as usual on Monday.

For all practical purposes, the bank essentially switched ownership.

My rink dink business has about $1.2 in the operating checking account this afternoon. If I can only access 250K of it Monday morning I have a major problem.

Why not spread over 4 banks?

DP - I work for a midsize company that has about $40 million in revenue. One payroll is $750,000. It's wildly impractical to think a business should spread their money over different accounts not over $250K.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I don’t think you all understand what happened. FDIC took over the bank. All FDIC-insured deposits are guaranteed and FDIC will pay a dividend out against non-insured funds. Branches will open as usual on Monday.

For all practical purposes, the bank essentially switched ownership.

This isn’t a bank for mom and pop. These are startups and VCs, which banked their operating capital at SVB. It was a symbiotic relationship since SVB dabbled in VC as well. But they had balances much bigger than $250k. I thought I read about 90% of funds were not FDIC insured.

Now that doesn’t mean it’s loss, but it means assets are frozen until court bankruptcy is processed, and there will be a haircut for what is recovered.

Customers will get a dividend against uninsured funds within about the next week. That’s according to the FDIC’s announcement.

Well as long as dividend payments match their capital needs that will help.

Anonymous wrote:

Anonymous wrote:Wonder how many VC partners got out in time because they have insider knowledge?

SVB sold $3M stock on MONDAY!!

I smell an SEC investigation for insider trading.

Maybe now is a good tie to revisit why they can't forgive student loans but can think about bailing out a multibillion dollar bank?

Anonymous wrote:Wonder how many VC partners got out in time because they have insider knowledge?

The run was prompted by SVB pursuing a sale. VCs got spooked. SVB tried to get them to stick with the bank but they wanted out.

Anonymous wrote:Wonder how many VC partners got out in time because they have insider knowledge?

SVB sold $3M stock on MONDAY!!

Anonymous wrote:

Anonymous wrote:I don’t think you all understand what happened. FDIC took over the bank. All FDIC-insured deposits are guaranteed and FDIC will pay a dividend out against non-insured funds. Branches will open as usual on Monday.

For all practical purposes, the bank essentially switched ownership.

This isn’t a bank for mom and pop. These are startups and VCs, which banked their operating capital at SVB. It was a symbiotic relationship since SVB dabbled in VC as well. But they had balances much bigger than $250k. I thought I read about 90% of funds were not FDIC insured.

Now that doesn’t mean it’s loss, but it means assets are frozen until court bankruptcy is processed, and there will be a haircut for what is recovered.

Customers will get a dividend against uninsured funds within about the next week. That’s according to the FDIC’s announcement.

Wonder how many VC partners got out in time because they have insider knowledge?

Anonymous wrote:Will this finally kill crypto so we don't have to hear about that scam anymore?

Maybe. BTC is down I think as people try to raise other liquid assets.