Like many in the business community, we followed the collapse of Silicon Valley Bank with a mix of morbid curiosity and nerves.
And like many, we have complicated feelings about the eventual solution. We both appreciate government leaders taking decisive action to stave off any damage to the broader financial system by guaranteeing all of the bank’s deposits… and also worry about the long-term risk that could come from giving investors a sense that they’re playing with house money.
Mostly, though, we’re relieved that all the businesses who banked at SVB were able to keep making payroll.
Now, the whole situation has been written about extensively by folks who have far more experience in this area than we do. We’re not going to try and piggyback on any of that commentary.
But we’ll simply say that the whole saga is a terrific reminder that nothing in life is certain or stable.
After all, a bank with $200 billion in deposits that have been largely invested in Treasury bonds feels about as rock-solid as it gets… until one day it isn’t. Likewise, even Silicon Valley titans revealed the fundamental vulnerability that lies beneath their wealth and power during a weekend of panic before the FDIC announced it would step in to protect depositors.
In the end, nobody gets out alive.
That’s not a good thing or a bad thing — it just is what it is. Even in these most modern of days.
However, we can learn to navigate uncertainty with greater ease. That starts with facing it head-on: accepting the reality of impermanence rather than trying to defeat it.
Oh, and despite our misgivings about the potential downside of backstopping deposits, we do see a valuable lesson there, too:
Deservedly or otherwise, we can soften the slings and arrows of our uncertain world by looking out for each other. Compassion — in all its many forms — goes a long way toward making a bumpy ride feel smoother.
Most of the time, it doesn’t cost $200 billion, either.