It seems to me that there is an upper limit to a bank where they just cannot do business efficiently. If a bank has more deposits than they can grow their loan book, they’ve crossed that line. This bumps up against the too-big-to-fail problem we had in 2008 as well. If the banks can’t manage their growth, perhaps they should be broken up and/or have limits placed on their size.
And if you think about it in terms of what deposits look like from the bank side, every deposit a bank takes in is effectively money they’re borrowing. SVB borrowed more money than they could afford to borrow.
