https://www.mercurynews.com/2023/03/16/krugman-how-bad-was-the-silicon-valley-bank-bailout-pretty-bad/

So the feds stepped in to protect all deposits at Silicon Valley Bank, even though the law says that deposits only up to $250,000 are insured and even though there was a pretty good case that allowing big depositors to take a haircut wouldn’t have created a systemic crisis. SVB was pretty sui generis, far more exposed both to interest risk and to potential runs than any other significant bank, so even some losses for larger depositors may not have caused much contagion.

Still, I understand the logic: If I were a policymaker, I’d be reluctant to let SVB fail, merely because while it probably wouldn’t have caused a wider crisis, one can’t be completely certain and the risks of erring in doing too much were far smaller than the risks of doing too little.