"A giant bailout." - Aaron Klein

He hoped they would sell the assets of the bank and not resort to providing unlimited deposit insurance.

Some market risk and have some banks bear some risk.

SFB had 97% uninsured deposits. Whose biggest account seems to have been a $3b account with a cryptocurrency. And a bank where all the insured depositors had already been taken care of. "We're risking a fundamental structural change to our regulatory system, in a situation where you had a bank completely under the nose of the SF Fed. Where was the supervision?" It grew massively over a couple years and and blew up a giant unhedged interest rate risk tied to Fanny, Freddy and US Treasuries. "That should be red flag red flag red flag for regulators," said Rajan.

But what should have been done differently? Like many banks, it received tons of stimulus deposits, and short term bonds wouldn't have made any money, and it chose long term bonds. The Search For Yield problem when the Fed pumps the system full of liquidity while having rates so low banks don't make any money, so they end up taking more risk.

"I cannot believe the pres dared to say well we just need more regulation. I thought they already did that. " - Bahnsen
 
The Fed continuing to pump in liquidity past where they needed to is the real issue, said Bahnsen, which led to crypto and silly IPOs and SPACs, that's how that deposit base came up. And then they overtightened and destroyed value on the way down.