Some upset that the venture capitalist who used SVB are being bailed out?

The question regards whether or not the Administration has authority to lift the $250,000 deposit insurance cap by mere wave of the hand?

So I do find this question interesting and it strangely never occurred to me until I started reading the critics of the latest move to bail out the depositors... many of whom are rich billionaires.

My focus was not on the rich billionaires, but rather on the underlying principals of protecting the interest of depositors at a time where a lack of protection could lead to a broad unwinding of our banking system. That being said, there are a couple of questions worth asking.

First is the obvious. Does Yellen and gang have the sort of authority necessary (without congressional approval) to hand out billions of dollars in relief that is not really written into the banking laws? Our deposits are only insured for $250,000 which is a reasonable amount for 90% of Americans. Certainly we should all know to diversify our investments and it seems unlikely that most Americans would have $250,000 in a bank account. There is a reason why there is a limit? If there is a limit, then to what authority is our Administration using to justify lifting it here? Are they even suggesting that they have the authority?

The second question goes to choices? If you are looking to start up a business, part of what you have to decide is who to bank with. In fact, this might be a very important consideration. These are players who probably decided in part to work with SVB because of the very issues that brought the bank down. They may have made the choice to work with a socially and politically aligned bank (rather than a band solely focused on finances) and I guess doing so would be a risk. Perhaps the wrong lesson is being sent by simply bailing them out, leaving them thinking that they should always invest in politically correct ventures (rather than fiscally sound ones) because even if they fail, they will be bailed out.

Two very interesting questions that I am sure many are afraid to ask. I am sure even more people would be afraid to answer them honestly.