Another point for the side saying that there was nothing unusual or particularly risky about SVB's assets, the problem was it's exceptionally flight-prone depositors.
One way of looking at this is that the Federal Reserve is currently carrying out a program of rapidly reducing the value of the assets in the banking system, without any particular plan for what will happen as they fall below the level of banks' liabilities and then their deposit
It seems like many other banks would be objectively just as vulnerable to a run as SVB was, if their depositors were as socially connected and as given to chasing after the next shiny object as tech companies and their funders are.
In the 1950s, when macroeconomic thought was more advanced than it is today, it was evident to people that asset prices are, after all, prices, and destabilizing them to (hopefully) stabilize other prices is not always a win for overall price stability.
People, and in particular people who run banks, make all sorts of decisions and commitments on the assumption that some structure of asset prices will obtain in the future. Sudden changes will impose the same kinds of costs that large unforeseen changes in any other prices will.
People talk about hedging interest rate risk, but at the level of the banking system as a whole, I don't see how that's possible. There are a lot of assets that whose market value falls when interest rates rise. Somebody has to be holding them.
Households and businesses need liquid assets - deposits - for all kinds of transactions. And they need to finance long-lived capital goods. Somebody has to be on the other side. That's what the banking system is for.
Rapidly raising interest rates is going to create large losses in the financial system - I don't see how they can be hedged or engineered away. And given the nature of banking, they are likely to emerge in sudden crises.
As @IrvingSwisher says, high rates weaken the bank balance sheets and make them more likely to fail. This isn't incidental - it's part of the transmission of monetary policy, since safety/liquidity is what the income from loans is being traded off against.
Logically, the Fed should have stood back and let SVB go through the regular FDIC process. That would have delivered a lot of the tightening of financial conditions that they're aiming for! But it seems that while they willed the ends, they couldn't stomach the means.
This snippet of Yellen the other day is a beautiful example of how the authorities seem unable or unwilling to acknowledge the logical implications of their actions. Either you are guaranteeing deposits, or you aren't.

There may be a way of threading the needle, where you sharply reduce the willingness/ability of smaller banks to make loans without threatening the viability of the banks themselves. But it seems like a hard problem, and it's not clear anyone at the Fed is even thinking about it.
Basically, Mary Daly wants her hairdresser to take a pay cut. At the same time, she doesn't want the banks to suffer any undue stress. The problem for her and her colleagues is that with monetary policy, it's hard to deliver the former without the latter.

Recommended by
Recommendations from around the web and our community.

Very good thread here. Capitalism is a two price system - asset prices and commodity prices (Minsky). Interest rate adjustments effect the former much more quickly and substantially than the latter. But its the latter CBs are trying to impact.