Sorry, your first sentence doesn't parse well here. So legally a bankrupt bank wouldn't owe anything beyond $250k to any client? But then there's the systemic issue that FDIC appears to care about, too. If there is contagion, they will have to pay more in total than to over-pay SVB clients so they overpay here and pray? Of course, FED cares about contagion even more than FDIC. FDIC going under has to be prevented at all cost.