<story><title>Yellen says government will help SVB depositors but rules out bailout</title><url>https://www.ft.com/content/6a77d81b-7376-4ccf-80a2-3336af04d04b?shareType=nongift</url></story><parent_chain><item><author>tsimionescu</author><text>First of all, even if the company you work for goes bankrupt, you&amp;#x27;re very likely to still receive your salary, as debts to workers are the highest priority in any bankruptcy case. So the risk to workers&amp;#x27; livelihoods is being way overblown. Of course, if a substantial amount of your compensation was company stock, you may lose a lot on that, but that is par for the course with stock.&lt;p&gt;Second of all, the purpose of having a limit to FDIC insured deposits is to limit the government&amp;#x27;s liability in case of bank failures to small-ish depositors. A company thag has millions of dollars to deposit also has more responsibility to evaluate the bank they are depositing in. Perhaps they shouldn&amp;#x27;t keep money in the bank in the first place, but find other uses for them.&lt;p&gt;Note that the true FDIC insurance limit is much larger than the 250k that usually gets cited - since there are various facilities for business accounts which can take that up to a million $ or more (multiple signers on the same account, multiple types of accounts). Should be plenty for most startups to pay their employees&amp;#x27; salary outright, even without going bankrupt.</text></item><item><author>idopmstuff</author><text>I&amp;#x27;m pretty baffled to see so much of this on HN. Like a whole lot of people here, I&amp;#x27;ve worked at startups for my whole career. People here are effectively suggesting that I shouldn&amp;#x27;t get my paycheck and that the company I work for should lose most of its money because our CEO used a well-reputed bank?&lt;p&gt;Absolutely wipe out the equityholders of SVB. They deserve nothing, because that&amp;#x27;s what you should end up with if you own stock in a company that goes bankrupt. Claw back executive pay if that&amp;#x27;s something you can do. But kill a bunch of startups because of their choice of financial institution? I just don&amp;#x27;t get where that comes from.</text></item><item><author>manuelabeledo</author><text>I see a lot of unexpected saltiness and clear misconceptions in any thread about SVB.&lt;p&gt;“Depositors shouldn’t get anything beyond the insured $250,000”. Then what do we do with the billions in remaining assets? Appropriate them, and leave small and mid businesses hanged to dry?&lt;p&gt;“This is a bailout”. It would be if shareholders were to get their money back, which doesn’t seem likely. The government will use the bank assets to make customers, not owners, whole.&lt;p&gt;&lt;i&gt;Generic screeching against the tech world&lt;/i&gt;. I get the schaudenfreude, but this will not hurt big tech and VCs as much as tens of thousands of small businesses, and the people employed at them. Some billionaires will be upset at some relatively insignificant losses, while hundreds of thousands may lose their jobs.</text></item></parent_chain><comment><author>idopmstuff</author><text>I&amp;#x27;ll probably get my next paycheck or two, but I&amp;#x27;ll lose my job. You&amp;#x27;re pretty clearly saying here that I should lose my job, along with many other people, because of the bank at which my company&amp;#x27;s cash is stored.&lt;p&gt;&amp;gt; Perhaps they shouldn&amp;#x27;t keep money in the bank in the first place, but find other uses for them.&lt;p&gt;I work at a small startup that&amp;#x27;s raised five million dollars. Not a huge amount of money, but obviously losing all but 250k would be extremely damaging. You&amp;#x27;re talking about concepts of fiscal responsibility here, but then you&amp;#x27;re suggesting that businesses should deploy virtually all of their cash and keeping close to nothing in reserve. Our founders are extremely fiscally prudent and purposely keep a very low burn rate, which is exactly why that money is in the bank instead of being used elsewhere.</text></comment>
<story><title>Yellen says government will help SVB depositors but rules out bailout</title><url>https://www.ft.com/content/6a77d81b-7376-4ccf-80a2-3336af04d04b?shareType=nongift</url></story><parent_chain><item><author>tsimionescu</author><text>First of all, even if the company you work for goes bankrupt, you&amp;#x27;re very likely to still receive your salary, as debts to workers are the highest priority in any bankruptcy case. So the risk to workers&amp;#x27; livelihoods is being way overblown. Of course, if a substantial amount of your compensation was company stock, you may lose a lot on that, but that is par for the course with stock.&lt;p&gt;Second of all, the purpose of having a limit to FDIC insured deposits is to limit the government&amp;#x27;s liability in case of bank failures to small-ish depositors. A company thag has millions of dollars to deposit also has more responsibility to evaluate the bank they are depositing in. Perhaps they shouldn&amp;#x27;t keep money in the bank in the first place, but find other uses for them.&lt;p&gt;Note that the true FDIC insurance limit is much larger than the 250k that usually gets cited - since there are various facilities for business accounts which can take that up to a million $ or more (multiple signers on the same account, multiple types of accounts). Should be plenty for most startups to pay their employees&amp;#x27; salary outright, even without going bankrupt.</text></item><item><author>idopmstuff</author><text>I&amp;#x27;m pretty baffled to see so much of this on HN. Like a whole lot of people here, I&amp;#x27;ve worked at startups for my whole career. People here are effectively suggesting that I shouldn&amp;#x27;t get my paycheck and that the company I work for should lose most of its money because our CEO used a well-reputed bank?&lt;p&gt;Absolutely wipe out the equityholders of SVB. They deserve nothing, because that&amp;#x27;s what you should end up with if you own stock in a company that goes bankrupt. Claw back executive pay if that&amp;#x27;s something you can do. But kill a bunch of startups because of their choice of financial institution? I just don&amp;#x27;t get where that comes from.</text></item><item><author>manuelabeledo</author><text>I see a lot of unexpected saltiness and clear misconceptions in any thread about SVB.&lt;p&gt;“Depositors shouldn’t get anything beyond the insured $250,000”. Then what do we do with the billions in remaining assets? Appropriate them, and leave small and mid businesses hanged to dry?&lt;p&gt;“This is a bailout”. It would be if shareholders were to get their money back, which doesn’t seem likely. The government will use the bank assets to make customers, not owners, whole.&lt;p&gt;&lt;i&gt;Generic screeching against the tech world&lt;/i&gt;. I get the schaudenfreude, but this will not hurt big tech and VCs as much as tens of thousands of small businesses, and the people employed at them. Some billionaires will be upset at some relatively insignificant losses, while hundreds of thousands may lose their jobs.</text></item></parent_chain><comment><author>phamilton</author><text>&amp;gt; So the risk to workers&amp;#x27; livelihoods is being way overblown&lt;p&gt;If this were 2015 I would agree. But it&amp;#x27;s 2023 and thousands of software engineers are already struggling to find work after layoffs. Companies shutting down en masse because of SVB will soften what is already an employer&amp;#x27;s market for talent.&lt;p&gt;This may hurt specific founders and VCs a lot, but total damages (in the form of a softer market for engineers) may hurt the average employee more, even if they aren&amp;#x27;t directly affected.</text></comment>