Letter: Double standards add insult to depositors’ losses

Published in the Financial Times.

“Oklahoma bank failure reveals double standard” (November 23), Lex rightly says, but the US deposit insurance double standard is even more egregiously unfair than the article suggests. Many of the uninsured depositors of Silicon Valley Bank were wealthy venture capital, private equity and cryptocurrency firms and barons, who would without doubt claim for themselves top financial expertise. They should have known the risks they were taking with their outsized, unsecured, uninsured deposits.

Moreover, these financial experts should have been on top of the mismanaged state of that bank in which they had so much at risk. Instead of having other people’s money taken to make them whole, they richly deserved the haircuts they would otherwise have had on the remarkably imprudent risk they voluntarily took.

I imagine these bailed-out Silicon Valley depositors deserved the losses they didn’t take far more than do the uninsured depositors in Lindsay, Oklahoma, (population 2,866) deserve the losses they are taking.