A policy goal of FDIC is that ordinary consumers within formal insured limits not worry about bank solvency. It is absolutely not a policy goal of FDIC that businesses brokering deposits abjure concerns about solvency. 1/

I agree that it's perhaps too much to hope for, but brokers of deposits evaluate the marginal risk of even FDIC-insured banks versus the interest spreads some banks offer precisely to attract brokered deposits. 2/

FDIC, at least under prior-to-SVB understandings, did not exist to tell ROKU it didn't need to worry about bank solvency when depositing $1B in a single bank. 3/

You can argue — I sometime have! — that basically any depositor-side diligence is too much to hope for, and that regulation must substitute for all of that. 4/

But that is not, even now post SVB, the actual status quo. Business customers retain some responsibility for the banks with which they do business. 5/

In the case of FBO accounts, the very clear obligation of the businesses arranging them is TO BE SURE THEY ARE ADEQUATELY DOCUMENTED SUCH THAT THEY ARE INSURED WITH CERTAINTY BY FDIC. They must be as safe as personal checking accounts at the same bank. 6/

Obviously, Synapse failed to fulfill this obligation. /fin