The bank run happened because the bank was technically insolvent, and the situation was quickly deteriorating. Bonds are low risk of default. They are not “low risk” in an economic sense. If I take my money and I stuff it in a mattress, that’s low risk that the government or a bank will steal it from me, but high risk in an economic sense - it will become less valuable over time, unless all investments shrink.

What happened here was that the bank tried to invest in assets that had low risk of default, and in order to get better percentage terms, said “ok and also you can take my money for a very long time without giving it back.” As a result of that, they got more money. But that gives you more money because it’s risky! And a bank’s job is specifically to manage this exact type of risk - borrowing short to lend long is the core business model. And they lost track of what they were doing, because their deposits grew immensely in just a few months.

On paper, SVB was in the worst shape of pretty much any major bank, and that fact was what sparked the run. When you hear these VC guys going apeshit - these guys didn’t spark the run. They’re morons, they’re screeching because they were almost left holding the bag, and the bag was emptying. The guys who actually “started” the run were fine, because they understood what was happening and acted appropriately