"If you look around the table and don't see the fool, you're the fool." - If you don't think you're the fool, you're probably not considering unforeseen consequences. The government is now backstopping SVB . They say that no taxpayer money will be used, assuaging most people's fears. So where is the money comoing from? Banks will now pay more deposit insurance. This will lower the rate they will pay on deposits or force them to lose profits, away from equilibrium. Maybe they make riskier loans or charge more interest than they would. Also, now that they are backstopped, there's moral hazard. They will take more risk because they have that confidence. And people will deposit more money because of the guarantee.