How deep is the rot in America’s banking industry?
People seem to have a really hard time with the idea that, in the SVB debacle, the system worked effectively and pretty much the way it was planned to. It&#x27;s not even clear what people are upset about. There&#x27;s an article on the front page of The Atlantic today about how angry we should be about SVB, and if you read it, it&#x27;s hard to figure out who those angry people should be.<p>Equity is getting zeroed out. Management was fired. Depositors were made whole almost immediately. SVB&#x27;s assets are apparently not impaired; SVB would have held them to maturity had the bank run not happened, and now somebody else will instead. A bank made bad risk management decisions and got zeroed out; all the right incentives not to do that again are there. Meanwhile: the point of the FDIC system is for customers not to have to do this kind of risk assessment themselves.<p>It is remarkable how badly SVB managed to fuck this whole situation up. But SVB is gone, so it&#x27;s not much fun calling them out. I feel like people are flailing looking for someone else to blame.