America’s banks are missing hundreds of billions of dollars

It is easy to understand how money gets destroyed in a traditional bank run. The crowds want their cash and bank tellers are trying to provide it. When customers flee, staff cannot satisfy all comers before the institution topples. The depositors fleeing Silicon Valley Bank did not ask for notes and coins. Nor were deposits written off when the bank went under. Instead, regulators promised to make svb's clients whole. Although the failure of the institution was bad news for shareholders, it should not have reduced the aggregate amount of deposits in the banking system.