You will recall that one of the points I made in regard to the Silicon Valley Bank and other bank issues is that federal and state regulators are supposed to regularly monitor and audit bank financials and financial practices. In the aftermath of the crisis caused by a mismatch in asset duration and liabilities, in particular depositors ability to draw cash, of course we now are seeing all kinds of stories about how the regulators were in fact aware to the issues and had “communicated concerns” to the bank. (See here for example, New Yorker Story)
These stories are partly prompted by typical regulator cover-my-ass ism. They screwed up and they know it, so now they will point fingers at each other, the bank, etc. They knew there was a serious problem with asset duration and essentially ignored it. Why did that happen? I can tell you exactly why, because the higher ups who have to approve more drastic action are all political appointees and all members of one party–in California and in the federal government. SVB is woke, wastes lots of money on DEI and on climate garbage and most importantly, gives lots of money to Democrats. So there is no way they were going to embarrass or harass a good progressive bank, no matter what the cost. This is pure politics.
And that is, as I said in the earlier posts, why it would be wrong to not make the entity depositors whole. Rich individuals over the $250,000 should be on their own, but companies with payrolls to meet and vendors to pay, many of which are small businesses, should be able to trust that banks are sound and are in fact being vigilantly monitored by the multiplexity of regulators who oversee them. And the regulators who failed to take action should be fired and charged with civil or even criminal negligence.
The Healthy Skeptic is a website about the health care system, and is written by Kevin Roche, who has many years of experience working in the health industry. Mr. Roche is available to assist health care companies through consulting arrangements through Roche Consulting, LLC and may be reached at 
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Exactly right. All the regulators seemed to be surprised. But not everyone was surprised. Union Square Ventures told their clients in November. Peter Theil told his clients in January. I think this is important. How did they know? I guess they took the time to research the bank and then acted on the findings. Why can’t the regulators do that? Politics, cronyism all the usual suspects.
Nailed it!!
I don’t necessarily disagree with you that depositors need to be made whole. But at the same time, the Fed needs to change the $250k rule so at least the process is transparent. A business or individual shouldn’t have to worry about the money they put in a checking or savings account being there when they need it. Maybe they need to keep the cap at $250k and then any amount over that and you pay a fee that goes to insure the portion of their deposit that’s above $250k.
At the same time, I don’t blame people for being mad that they have to essentially bail out depositors when the law isn’t written that way.