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Did Silicon Valley Bank Go Broke When They Went Woke?

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AP Photo/Jeff Chiu

Silicon Valley Bank is no more. The go-to loan center for the tech industry folded over the weekend when it was announced that the institution needed to raise a massive amount of capital to cover huge losses. It was leveraged heavily with high tech, a sector that's taken a beating on Wall Street. This development caused a run on the bank, which led to California taking over and handing over control to the Federal Deposit Insurance Corporation. Many bad decisions led to the bank's collapse, but one stands out the most.

It appeared to have a corporate environment that was progressive and lackadaisical. The United Kingdom branch had a risk assessment officer more concerned about creating safe spaces, inclusivity, and promoting LGBT events than doing her job. Now, the company has released a statement that SVB UK was some fenced-off entity from the US branch. Okay—the US branch didn't even have a risk assessment officer for nearly a year before the bank failed. 

In both cases, there was no risk assessment officer; the UK branch might as well not have hired one, given what this person was doing. Was this financial calamity avoidable? It could have at least been mitigated. There was zero chance SVB would divert aggressively away from tech startups, but someone could have raised red flags. 

How could no one be hired for this crucial position for nearly a year? We still don't have an answer for this egregious oversight. The debate now turns to whether there should be a 2008-style bailout. Janet Yellen threw cold water on that, but a non-bailout bailout package is being offered as Biden scrambles to do everything he can to prevent a Dow Jones meltdown. 

No corporate officer was hired to analyze investment risks: that alone makes a case for why this bank should burn. I don't care that the UK branch was a walled-off entity; it still had some woke executive not doing her job. Almost like here, where SVB didn't even hire a risk assessment officer. It's the same bag of incompetence, partially comprised of Silicon Valley's arrogance, which is why Mark Cuban allegedly hates working with these people.  

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