Technology

To be fair, SVB kind of did run out of money. They invested heavily into Treasuries, so as rates increased, their investments were devalued, which meant they wouldn't be able to cover their debts if they sold everything or if withdrawals significantly outpaced contributions.

The banks that remained solvent diversified their investments.

The real cause of this is inflation. The Fed raised rates to combat inflation, and raising rates increases their own rate for borrowing, meaning Treasury yields increase, which means new Treasuries are more attractive than older Treasuries, which means older Treasuries sell for less than face value if not held to maturity. The causes of the rampant inflation are varied and include:

• supply chain disruption, which led to increased prices due to COVID-19 related inefficiencies
• government stimulus packages, which delayed demand changes due to supply chain disruption
• shift in demand patterns due to stay at home orders, and a big shift back once those orders were lifted
• a long period of near zero borrowing rates to "stimulate the economy" despite being in a bull market
• delayed Fed response due to not wanting to destabilize the economy (end many thought supply chain issues would be short lived)

All of that combined led the Treasury rates to increase faster than most expected, which meant a lot of longer term Treasury investors were left holding depreciating investments.

In short, SVB ran too much risk and were punished for it.

Keep it shitty. Modern folk tale style.