Voices from tech and finance are increasingly calling for the federal government to push another bank to take over the failed Silicon Valley Bank.
acquiring SVB before the open on Monday, a prospect I believe to be unlikely, or the gov't guaranteeing all of SVB's deposits, the giant sucking sound you will hear will be the withdrawal of substantially all uninsured deposits from all but the 'systemically important banks' .","If SVB depositors aren't made whole, then corporate boards will have to insist their companies use two or more of the BIG four banks exclusively. Which will crush smaller banks.
Since its founding almost 40 years ago, SVB had become a centerpiece of finance in the tech industry, particularly for startups and the VCs who invest in them. The firm was known for extending banking services to early-stage startups which would have struggled to get banking services elsewhere before generating stable cash flow. But the firm itself faced cashflow problems this year as startup financing dried up and its own assets were locked down in long-term bonds.
"This was a hysteria-induced bank run caused by VCs," Ryan Falvey, a fintech investor at Restive Ventures, told CNBC on Friday."This is going to go down as one of the ultimate cases of an industry cutting its nose off to spite its face." Observers are calling out the irony as some VCs with notoriously libertarian free-market attitudes are are now calling for a bailout. For instance, reactions to Sacks' tweet included statements like"
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