The swift action of the US federal authorities and the UK government in securing Silicon Valley Bank depositors' access to funds is clearly a relief for its clients. Good news for depositors, but for shareholders and bond holders? Not so much. Essentially the authorities have put the customer first.
There's been a lot written already about SVB, and no doubt a lot more to come. One interesting aspect though which seems to have had less attention is the pre-crash depletion of funds arising from clients' search for better returns. Quite simply SVB was not passing on the benefit of higher interest rates to its depositors, and so they did what customers always do when they feel undervalued. They moved.
SVB is not alone in this of course. Every company has to balance stakeholders' demands. Looking after customers first just might have produced a better outcome for all stakeholders.
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