There can always happen the situation that customers of a bank want their money that they deposited there back.
In the insurance sector, the situation that a singular event (say, a hurricane) causes damages to a lot of customers at once is a well-known phenomenon, named a "cumulative event". Every insurance company has to model this and thus there exist mathematical tools for this such as copulas: https://en.wikipedia.org/wiki/Copula_(probability_theory)
A bank should better the model the event that a lot of customers want their money back, too. If it does not, there is something deeply wrong with the bank's risk management.
Thus, in my opinion, the article victim-blames venture capitalists to be "evil" while the true culprit are the bankers who did not factor in the cumulative event that lots of customers want their money back (which was given to the bankers by the customers to be held in safe custody) into their risk management.
> which was given to the bankers by the customers to be held in safe custody
That simply not how banking works. Many individuals think of banking that way, and they can because FDIC insures their deposits for up to $250k. (Which for the average person might as well be infinite.) But companies are supposed to understand and manage risk better. A corporate bank account is not and has never been a black box to just dump your funds in without worry.
In the insurance sector, the situation that a singular event (say, a hurricane) causes damages to a lot of customers at once is a well-known phenomenon, named a "cumulative event". Every insurance company has to model this and thus there exist mathematical tools for this such as copulas: https://en.wikipedia.org/wiki/Copula_(probability_theory)
A bank should better the model the event that a lot of customers want their money back, too. If it does not, there is something deeply wrong with the bank's risk management.
Thus, in my opinion, the article victim-blames venture capitalists to be "evil" while the true culprit are the bankers who did not factor in the cumulative event that lots of customers want their money back (which was given to the bankers by the customers to be held in safe custody) into their risk management.