Silicon Valley Bank is a particularly scary failure. Here’s why.

• SVB had almost 90% of its deposits uninsured by the FDIC.
• JPMorgan has only about 43% of its deposits uninsured via this US government backstop.
• This made SVB especially vulnerable to a bank run. And the cleanup could be messier than usual.

The collapse of Silicon Valley Bank is no normal bank failure. SVB Financial was a special kind of financial institution, and this was one reason for its demise.

Most US banks take in customer deposits and lend money out. Most bank accounts have less than $250,000 in them. That’s the amount that the US government, through the FDIC, insures. So when things go wrong, bank customers can rely on getting all their money back, up to $250,000. This prevents classic bank runs, where everyone worries their money is locked up and they all pull the cash at once.