Silicon Valley Bank fell down last Friday. The shocking news swirled in my company's Slack channel Friday morning. I didn't have much regard for it because I didn't have any accounts in SVB. But I realized it was not others' affair when I saw a message: "Do we bank with SVB?"
Many companies (especially Bay Area startups) panicked; the frozen bank account before payday should be a nightmare scenario for business owners. Unpredictability made everyone terrified.
And today, the regulators answered that all depositors could access all their money from Monday. And it would be no bailout: "no losses associated with the resolution of Silicon Valley Bank will be borne by the taxpayer."
This incident made me have complicated feelings. SVB did not try to rip off or deceive customers; they did not play dangerous games on crypto or high-risk investment. This was an old-school bank run, and it was because they tried to keep faith with the public (by... selling their securities). SVB has been beloved by many startups; I heard a lot of compliments before: they always tried to do their best to help regional startups. It was a catastrophe due to the loss of solidarity.
We could not blame those who ran into banks. They should have significant reasons and needs. But seeing those who were selling cryptos in this fuss made me sick.
Yes, Yellen and Powell answered. The system is solid and protects people. The system worked, and it will.