As I said, the scenario outlined is hyperbole... Practically, they won't actually bet on red but use all kinds of financial instruments to achieve the largest a

As I said, the scenario outlined is hyperbole... Practically, they won't actually bet on red but use all kinds of financial instruments to achieve the largest amount of yield possible with the depositors capital at their disposal. I'm aware the bank is wiped out and the deposits are no longer managed by SVB. None of this refutes the point that until the bank goes bust, the bank will try to maximize yield and shareholder returns with the cost being their own capital. The depositors capital, is an extra with no cost. As far as I am aware, shareholder profits won't get clawed back. Now that the $250K FDIC barrier has been lifted, the moral hazard is that the bank (not SVB which no longer exists, but any other bank) is no longer responsible for whatever happens with the capital of their customers - even if they would go completely bust; the FDIC will fix it.