.@BillAckman is right. There are two systemic crises underway right now: (1) Startup Extinction Event - thousands of startups and small businesses won’t be able to make payroll and will immediately need to furlow or layoff employees if the FDIC does not release at least a substantial portion of their deposits on Monday. Payroll is Wednesday for most companies. That is D-Day. Directors in California are personally liable for unpaid wage claims so the layoffs will begin immediately if FDIC does not announce a plan to release funds. (2) Regional Banking Crisis - the contagion will spread and there could be runs on other banks if the Fed does not provide reassurance that deposits are safe. As Larry Summers said, this is not the time for lectures on moral hazard. The stockholders and executive options of SVB are going to be wiped out — that solves the moral hazard problem. Blaming depositors is like placing the blame for medical malpractice on patients because they didn’t do a good enough job shopping for a doctor. Depositors expect the Fed to ensure that banks are safe. Even Bill as a very sophisticated investor says he has a hard time evaluating bank balance sheets. It’s unrealistic to expect small businesses to do that. In summary, the Fed needs to bearhug the situation. Announce that all deposits are safe. End the crisis. It will cost very little, if anything, because SVB actually has plenty of assets to pay off depositors. The costs on the banking system and economy will be far greater if they under-react. The banking system will further consolidate in the hands of a few “too big to fail” banks. None of this will help the little guy.