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> So how would letting depositors get wiped out stop these executives and shareholders from repeating SVB?

That would not be what I would argue for, but at 10% haircut for all depositors would create a nice incentive for reverse KYC.



You know, I suspect part of the problem is the lack of diversity in SVB's depositor base. When the tech sector took a hit, a significant chunk of SVB's depositors started to redraw money, combined that with their reduced liquidity due to higher interest rates killing the market value of the long term bonds they held*, it lead to a run.

* I don't really know if we should blame them for that. Who could have expected interest rates to rise so sharply, much less anticipate all the consequences from it doing so?




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