We definitely disagree, because anything less than 100% was going to result in the failure of other banks -- probably FRB among them. (It's very hard to argue that there wasn't systemic risk when Signature also failed!)
Isn't this a bit of a narrative switch? It seems like this started with empathy for founders and employees of companies with deposits at SVB, and I feel that very strongly, for all those individuals.
But then there's this whole other narrative about the banking system as a whole, and that side of this I'm much more annoyed by. It really reminds me of the financial crisis bailouts, which I found frustrating, being painted into a corner like that and forced to save the banking industry. And this is frustrating for the same reason. Which is not to say it isn't the right decision! It was the right decision in the financial crisis and I trust that it's the right one now.
But until the FDIC and Fed and Treasury clearly all came to this conclusion, I was more skeptical of this narrative, because most banks don't have such a high concentration of uninsured deposits as SVB did.
But I do trust that the regulators had more information than me about the systemic risk of this, and made the right decision, and like you said, I'm very glad we have that institutional capacity.
