Silicon Valley Bank and Signature Bank Reignite ‘Moral Hazard’ Dilemma Bitcoin Was Designed to End

The other thing almost certain to be lost in the shuffle is that even without the new backstop, SVB and Signature depositors would likely have been largely OK. In a normal bank failure, the FDIC oversees the sale of the illiquid bank. Depositors in this scenario can take a haircut, perhaps losing 10%-15% of their deposit value over the $250,000 FDIC insurance threshold. On Sunday morning before the backstop announcement, Bloomberg sources said 30%-50% of uninsured SVB deposits would be available Monday, with the rest available over time. (SVB was CoinDesk's bank.)