Alas, for Silicon Valley Bank they went with 'too big to fail' and also covered uninsured deposits. That's moral hazard and endangers the core purpose of the insurance.

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vitus 13 hours ago | parent [-]

Agreed. That said, FDIC would have not been able to cover all $150 billion or so of uninsured SVB deposits directly from the insurance fund, so had that been the only available option for making depositors whole, then FDIC would have had to pass.

	▲	eru 6 hours ago \| parent [-]
		Well, insurance should only covered insured deposits. > [...] so had that been the only available option for making depositors whole, [...] On paper, FDIC might be independent and have its own balance sheets. But in practice and given politics, FDIC itself can't fail / isn't allowed to fail. It'll always be bailed out, and that's what the market expects. For the stability of the economy, it would have been better not to make uninsured depositors whole.