The banking industry, government regulators, and investors alike are still processing the March 10 collapse of SVB Financial, the parent company of Silicon Valley Bank (SVB). It was the second-largest bank failure in U.S. history, with $175 billion in customer deposits on the line.
But this crisis had one unique (and worrying) feature: Just 6% of those deposits fell within the $250,000 deposit insurance limit mandated by the Federal Deposit Insurance Corporation (FDIC). Most of SVB’s customers were technology companies, investors, and high-net-worth individuals, which meant the majority of them faced the prospect of a total loss.
This post originally appeared at The Motley Fool.