Depositors with big cash holdings are – reasonably – expected to be aware of the risks and spread their cash around several institutions. Businesses backed by venture capital, such as the customers of SVB, ought to have been advised how to manage their liquid holdings.
... the sight of depositors being made whole ... provides a disincentive for both depositors and banks to be prudent. There’s no reward here for SVB customers who banked more carefully.

A good first step... would be to cease the present practice of fully paying out uninsured depositors when bank failures occur. This practice, of course, is de facto insurance [emphasis in original] ... Paul Duke, Jr. reports that "many [bankers] support proposals to give depositors a 'haircut' a 10% of 15% loss on deposits above the [FDIC insurance limit] — when a bank fails. Two of banking's biggest guns, Citicorp Chairman John Reed and Chase Manhattan President Thomas Lebrecque, support variations of this proposal (WSJ, Aug 3, 'S9, A16). ... Such a shift in policy should not encounter insuperable opposition since it falls far short of enforcing the insurance limitations which legally already exist.
Since the Continental Illinois bankruptcy the federal banking and S&L authorities have adopted a too—big—to-fail policy. The policy is closely related to the unwritten policy of rescuing any faltering American corporation if it is large enough. The most notable cases so far have been Continental Illinois and Chrysler.
...In the beginning this de facto extension of coverage only applied to the banks and S&Ls which were large enough to have a wide financial influence. ... only the eleven largest banks were originally covered, hence the designation "too-big—t o—fail". The government however was rightfully criticized for this policy on the grounds that it put smaller banks at a competitive disadvantage, so, to correct this inequity the government has for several years made it a general policy to pay off all depositors in both large and small failed banks.

Why did you jump subjects? Local news never did longform journalism of the sort we're discussing, at least not small papers, even in their postwar heyday (to the 1990s or a bit before). Newsday maybe, if we call that 'local'.

https://www.cnbc.com/2023/03/12/regulators-close-new-yorks-signature-bank-citing-systemic-risk.html
and now signature bank. "Crypto-focused." When will the idiots in charge of everything finally wake up and PROHIBIT crypto??? Shit.

First Genesis (lender), then Silvergate, now Signature..... fun times in cryptoland!

https://www.cnbc.com/2023/03/12/regulators-close-new-yorks-signature-bank-citing-systemic-risk.html
and now signature bank. "Crypto-focused." When will the idiots in charge of everything finally wake up and PROHIBIT crypto??? Shit.

Where does the government get all this money to cover depositors not covered by FDIC insurance?
PS - There’s one in every crowd.

A special assessment on banks will be implemented (as required by law) to cover Deposit Insurance Fund losses attributed to uninsured depositors.

You think maybe Wells Fargo laid off the guys who just said to "buy Signature Bank, New York", which was closed today by its state chartering authority?
Nah, probably not.

What I find odd is that KRE, the regional bank ETF simply didn't move lower on Thursday and Friday. They were leaking oil beginning Monday, down over 16% for the week. Someone knew what was happening before the press and the public became aware.