After Friday’s collapse of Silicon Valley Bank, big bankers are again looking to Washington with outstretched hands. We should be skeptical.
It certainly makes sense for Washington to take emergency action to backstop the depositors of New York’s own Signature Bank, a collateral consequence of SVB’s flameout. Many are entities like small business and co-op boards that never intended to take on significant risk or game the markets and simply were looking for a place to park operational cash and reserves.
Less sympathetic is the money in SVB, the darling of the risk-enthusiastic, over-leveraged Silicon Valley venture capital circuit — well, risk-enthusiastic and libertarian right up until the money disappeared, at which point the turn to looking at the feds for a bailout gave us whiplash.
