On Sunday, the Treasury and the FDIC, on behalf of the Biden Administration, committed to keeping depositors in failed Silicon Valley Bank (SVB) whole. The startup community exhaled a collective sigh of relief at the news.
This recent crisis underscored the need for a distant and sometimes antagonistic relationship between the US innovation economy and the US government. The fissure was most apparent as we watched tech leaders flail and fail to communicate with the right government officials, and the government’s delay in action or communication about the impending crisis.
Ultimately, the federal government moved to guarantee the deposits that were at risk for a few critical reasons:
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