Erebor vulnerable to synchronized depositor runs

The core risk is not crypto exposure by itself, it is a customer base that can all head for the exit at the same time. SVB, Silvergate, and Signature each depended on large, uninsured deposits from tightly connected networks, startups and VCs at SVB, digital asset firms at Silvergate, and commercial and crypto clients at Signature. Once confidence broke, withdrawals moved faster than normal liquidity planning could absorb.

• SVB showed how sector concentration turns a funding model brittle. Federal Reserve oversight found SVB was tied to the business cycles of science and tech customers, with large, irregular balances and a high share of uninsured deposits. FDIC officials said that connected depositor base helped fuel a run that unfolded in less than 24 hours.
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• Silvergate had a similar setup in crypto. Its deposit engine was the SEN network, which pulled in operating cash from exchanges, funds, and trading firms that all reacted to the same market stress. When crypto confidence fell, the bank had to sell securities at losses to meet withdrawals, then chose to wind down.
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• Signature added another version of the same pattern. FDIC data showed Signature also relied heavily on uninsured deposits, near 90 percent at year end 2022. Its Signet real time payments network and concentration in commercial clients made balances useful in good times, but more mobile in a panic.
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For Erebor, specialization can still be an advantage, but only if the balance sheet is built for synchronized outflows from day one. That means more capital, more liquidity, and a broader mix of operating accounts over time, so the bank keeps the upside of serving hard to bank sectors without recreating the funding profile that broke its predecessors.