In case you are totally oblivious, Silicon Valley Bank (SVB) suffered a bank run over the past week and became a failed bank. It is a decently large bank that services tech and crypto start-ups and in a crisis developing over the past weekend, depositors were left in limbo.
In the end, the US government/ Fed stepped in to protect all depositors. Not exactly a bailout as it is expected that all equity and bondholders will be largely wiped out. So big difference compared to 2008.
Thoughts On Bank Regulations
This definitely sets a precedence. If you think about it, there has to be tighter regulations to prevent a bank’s management from degening and taking huge risks with bank deposits, knowing that the deposits will always be guaranteed by the government.
If left to the free market, I guess shareholders and bond holders would have to take the steps to sue management and make an example out of them....