The Importance of Uninsured Deposits

In the US, historically about half of all deposits are uninsured. It's practical for small businesses, charities and so on to keep more than $250,000 in one place. But Silicon Valley Bank really stood out on that dimension. And most of the time, if you have a big first equity cushion, imagine that Silicon Valley bank had been funded instead of 90% through deposits, 80% through deposits and had 20% funding through equity. You can lose a lot of value and still not worry about deposits ever being impaired. U banks don't do that. We shouldn't be that surprised that there is uninsured deposits in because it's practical for Small Businesses,. Charities and so on