There have been 562 bank failures since 2000

I’m surprised the author didn’t include a chart like this: https://twitter.com/alistairmbarr/status/1634275645235793920. It shows how bad the SVB situation really is. It’s been very quiet since 2008 and its aftermath. Until now.

"Bank failures" are routine. Most banks are small. Small businesses make mistakes and fail all the time. Banks are just a special kind of business with a federally-mandated insurance regime and so fail in specific and spectacular ways. A smaller company that can't make payroll files chapter 11 and gets acquired piecewise over several years. A bank that fails gets instantly seized by the FDIC.

SVB happens to be notable here because lots of HN posters are customers or employes of customers.

And it's notable elsewhere because this is sort of a capstone on the current era of cheap VC money. The proximate cause may have been some questionable investment decisions, but the root cause of SVB's failure is the fact that startup funding dried up.

And... is that maybe a good thing? Over the last few years, the tech community, and HN in particular, has been been almost entirely fixated on funding and not technology. We talk about "founders" and not products these days. Series B rounds and not launches. Companies get acquired before an MVC is ready. No one even remembers "ramen profitable" any more.

So I looked it up. As of September 30, 2022, there are 4,746 commercial banks in the US. That's 11.8% failure in 23 years. That includes 2008.

Those banks total $23.6 trillion in assets. Looking at the tweet cited by ezekg, I'd eyeball that as about $1 trillion in assets in the banks that have failed in the last 23 years. So, 11.8% by number of banks, but only 4.2% by assets.

That's still more than I thought. But the real question is, of those $1 trillion in assets, how much did people actually lose, and how much did either the FDIC or a taking-over bank cover? Anybody have that number?

I'm not sure if we know how much of the blue bar is recoverable. SVB is holding a lot of fixed-income vehicles that currently yield less than:

* Depositing money in a fed account (available to banks)

* Depositing money in a money market savings account

* Every treasury instrument you can buy today

When they go to sell those assets, they may take a much bigger haircut than the pricing models suggest given the supply and demand. The assets definitely won't be worthless, but they may not be worth very much.

Is that "second largest bank failure of all time" adjusting for inflation?