It didn’t lose it all. About 90% is still there as assets and is being sold as we speak. The liquid assets have been sold already, so 50% will go back to the depositors next week.

If it hadn't become insolvent in the first place, there would have been no need to liquidate its real assets in order to pay off liabilities.

Of course but the point still stands. If it lost it all we’d all be in serious trouble. It lost ~10% and there’s a nonzero chance depositors will be made whole anyway (with zero taxpayer money involved).

You are unbanked? How well does this work in 2023?

I wish. Not completely. I do make every possible effort to move wealth off of banks though.