Joint statement by the Department of the Treasury, Federal Reserve, and FDIC

> It's slightly disheartening to see so many people on HN willing to invite a wider collapse of the US banking system in order to punish/hurt a group of people they deem to be "elite".

People are tired of being around rhetoric that students are undeserving of a bailout because they decided to take loans from banks that were more than willing to lend them money for degrees with no prospects of recouping, however, when banks make their own poor decisions the banks plead with the regulators they've been deregulating, defanging, and lobbying, there are calls for yet __another__ round of socialism. Only now we have no choice because the options are a) bailouts or b) systemic collapse of life as we know it. Tone-deaf.

We are now changing definitions as to what a 'systemically important bank' is, apparently it is no longer 1 of the big-5, but any bank that has 200,000 depositors. Why and how is a bank with 200,000 depositors in a position to bring the entire financial system to a halt?

In his Twitter spaces, Jason C. said that he is now a newly minted 'single-issue voter' looking at candidates that call for limiting of spending. Mind you, after he went on his all caps tirade on Twitter in an attempt to stoke fear.

What's disheartening is seeing the complete disconnect in comments like yours with the optics of the situation.

People aren't inviting the collapse of the system; they are criticizing the complete hypocrisy of those that call for financial prudence when it's other people's problems or needs but blame the government when they are now in a precarious situation. Utterly self-serving and shameless.

We're slowly chipping away at the social contract, seemingly all while forgetting the previous times when bank bailouts were given.

Rationalize this however you want, at the end of the day a bank mismanaged risk, it's C-suites cashed out before news hit, those in the know using means such as Podcast at their disposal, used their privileged position in order to get themselves out of harm’s way before others could, and now want losses to get socialized.

These guys will never learn, this will happen again, and in 10 years we'll be right back here, only eggs will cost 30$ a dozen and you'll be financing your microwave.

Confidence fell in SVB specifically.

We did not see broad bank runs because confidence in the banking system did not fall. And now we can see why: because the FDIC backstopped depositors.

Does this comment really start by complaining the rest aren't "useful" and then immediately switched to assuming it knows better than Janet Yellen about whether something will cost taxpayers?

Also, there isn't a bailout - protecting unnamed bank depositors is not a useful definition of a bailout.

Also, you spelled "depositors" wrong.

Modern civilized societies enable specialization.

You don't have to study plumbing, electricity, medicine, etc - you can buy all this stuff as a service. If something breaks, a person comes and fixes it.

This allows you to specialize on whatever you want to do - say, build a startup. Software. Painting.

This is absolutely, definitely more efficient than forcing everyone to learn plumbing.

Financial system is basically plumbing for money. It should be easier than plumbing, as in plumbing requires us to deal with unpredictable forces of nature. Money is completely in our minds, so controlling it should be trivial in comparison.

But it's not as reliable as plumbing. Which means it's poorly designed. People intentionally made it convoluted to make it possibly to fish in troubled waters.

If you claim that only people with "the wit" deserve their savings to be safe, you're disgusting.

The government is responsible for fiat money, by definition. They should make it safe. SVB problems were caused by insane interest rate jerk by the Fed. They caused the problem, they should fix it.

How it should work: government money is safe, but inflationary. If you have "the wit" you can escape from inflation. Last time I checked, the government does not prevent anyone from offering inflation-hedged products. Financial institutions can use the entirety of math to offer whatever they want.

Shouldn't the goal be to create a bank ecosystem that is more robust? So that the failure of one does not lead to a domino reaction of failures?