Let's not pretend to not understand what they are talking about.
It is more than fair to say that the FDIC insurance is common knowledge, and yet, depositors were bailed out despite understanding that risk. Furthermore, depositors have benefited from quite the entanglement with the bank that, in normal business, simply wouldn't fly.
The issue was the bank putting all of its deposits in illiquid long-term bonds that were worth substantially less if sold pre-term, and compounding that problem by becoming insolvent selling a large chunk of those bonds per-term at a huge loss to cover immediate liquidity needs.
Looks like it. Except I don't see that the bonds necessarily weren't liquid. They just kept going down as the Fed cranked rates up.
As some others have said in this thread: I'm just trying to talk about what happened, within my limited understanding. I'm not talking about who was right or wrong at all.
I am referring to the fact that startups that are being advised by VC firms had a requirement to keep their funds in the bank. If you think that SVB and the VC firms didn't have a special kind of relationship you're missing the facts.
I'm aware of the relationship betweeen SVB and the VCs, but it seems that you're confused about what you're arguing.
You're blaming depositors (specifically VC-funded startups) for "benefiting" from a relationship with SVB they were forced into by VCs, and want to deny making all of SVB's depositors whole on the basis of a bank relationship that, for many, was not their choice. Worse, you want the fact that VC-funded startups over-depositing their cash reserves in a single-bank to be used against non-VC funded depositors (i.e., other businesses in the SV area) to deny making them whole on the basis of a "special relationship" that was simply "geographically closest bank willing to provide a loan and banking services."
It is more than fair to say that the FDIC insurance is common knowledge, and yet, depositors were bailed out despite understanding that risk. Furthermore, depositors have benefited from quite the entanglement with the bank that, in normal business, simply wouldn't fly.