Collusion?

Just FYI, the Dodd-Frank Act is alive and well.  A portion of it was weakened, but the vast majority remains.  

True perhaps, but the part relevant to the current issue--oversight--is virtually gone. The reserve requirement, a vital mechanism to stop bank runs and failures, was drastically curtailed--that's what got SVB killed off.

Whether this turns into a full-blown crisis or remains an isolated incident (along with the Signature bank failure) will largely depend on how aggressively Republicans oppose efforts to reform the regulations. Unfortunately, in order to reassure the public, the millionaire gamblers will be repaid in full.

You've been leaking your political views all over the forum again and out of the sink lately.  

No rule against political statements outside the Sink. Yes rule against personal attacks. Quit trying to justify your behavior.

One of the things banks are required to do is stress testing.  The larger the bank, the more stringent the stress testing must be.  SVB had several things go against them, one of which was an old-fashioned run by the depositors to withdraw cash.  This caused SVB to sell some investments at less than par value, which caused them to go underwater faster.  If I were to guess, a run by depositors is not in any stress testing environment, because it's unheard of - except in SVB's case.  

Oversight takes many forms, but I don't think it's virtually gone.  

The killer was the loosening of the reserve requirements. Stricter oversight--pre-Trump Dodd-Frank--would have been in place at SVB due to its non-diverse asset profile.

In point of fact, a run by depositors is precisely one of the "stresses" the audit process is supposed to test for. That would have been done well before the run if Dodd-Frank was fully in place as originally written. Asset diversification, or lack thereof, is a fundamental stress test.

If you sell a T-bill at below par value, you probably lose less than half a percent, because, after all...they're T-bills and the market would be thrilled to buy them at even a nominal discount. The reserve requirement is that assets/deposits have to be 20% of all obligations (loans, CDs, etc.). There's no way selling T-bills at a discount could all by itself have caused their assets to dip below reserve. I'm given to understand that their assets included some shady shit like crypto, which they couldn't liquidate fast enough.

I'm sure we've yet to hear the whole story. Yay Trump!

Not saying it didn't happen, but I'm not aware of a lessening of reserve requirements.  There is a specific threshold for loans-to-deposits of 80%.  If a bank loans over 80%, they have to invest in other assets to make up the shortage.  Some things SVB invested in were quickly sold at a discount -- I'm thinking it probably wasn't T-bills -- and when so many depositors started wanting to withdraw, they took a large loss selling assets to meet the withdrawal demands, and become insolvent.  They were indeed investing in crypto from what I read.  

Stress tests are supposed look at all aspects of a bank's portfolio.  That falls under the responsibilities of the Chief Risk Officer, and they were without a CRO for several months.  I worked in banking for 42 years, and the examiners should have been watching them very closely, because like you stated, they had some shady shit there.  Making loans to Tech startups ranks high on the risk meter due to the huge chance of rapid failure for Tech startups.  The size bank that they were, they would even have onsite examiners taking up residence in their HQ.  I never ran across many friendly examiners, but it makes me wonder if SVB was somehow enticing their examiners to look the other way.  I think things were happening there that haven't come to light, yet.  

The reserve requirement in absolute terms wasn't altered, but when and how often it would be tested for was. One major change was the size of the bank and what would trigger an audit--there were three bank classificiations, with different net asset thresholds. Apparently the Trump dumps moved SVB from one class to a less scrutinized class.

What worries me most about this is contagion. Hysteria may cause other bank runs and failures. If Fox News runs some kind of fake story about a given bank, there might well be enough goobers who listen to them to put a severe stress on that bank. I doubt that one in ten people, or one in a hundred goobers, knows how the FDIC works.