If this is the case, then this bank deserved to fail. The whole operation warranted going up in flames because no one knew how to do their jobs. Silicon Valley Bank is no more, its keys taken from them by California officials who then turned them over to Federal Deposit Insurance Corporation. It was a go-to institution to get loans for tech start-ups, a sector that’s taken a beating on Wall Street. That doesn’t bode well since most of these ventures don’t profit from the outset, which means more cash injections and lines of credit.
In short, SVB was super exposed to fluctuations in the tech market, which led to massive losses, a call for new capital to be raised to cover the losses, and sheer panic among its customer bases. There was a run on the bank, leading to its failure, the second largest in American history. There was no risk assessment officer for eight months. It was no different at the bank’s United Kingdom branch, where its risk assessment executive spent more time worrying about creating safe spaces and pushing woke extracurricular activities. Might as well not have such a corporate officer at all if she’s not going to do her job (via NY Post):
Who the hell was in charge of risk management at SVB and what the hell were they focused on???— Comfortably Smug (@ComfortablySmug) March 11, 2023
A head of risk management at Silicon Valley Bank spent considerable time spearheading multiple “woke” LGBTQ+ programs, including a “safe space” for coming out stories, as the firm catapulted toward collapse.
Jay Ersapah, the boss of Financial Risk Management at SVB’s UK branch, launched initiatives such as the company’s first month-long Pride campaign and a new blog emphasizing mental health awareness for LGBTQ+ youth.
“The phrase ‘you can’t be what you can’t see’ resonates with me,’” Ersapah was quoted as saying on the company website.
“As a queer person of color and a first-generation immigrant from a working-class background, there were not many role models for me to ‘see’ growing up.”
Her efforts as the company’s European LGBTQIA+ Employee Resource Group co-chair earned her a spot on SVB’s “outstanding LGBT+ Role Model Lists 2022,” a list shared in a company post just four months before the bank was shut down by federal authorities over liquidity fears.
SVB was abruptly shut down Friday by the California Department of Financial Protection and Innovation shortly after it disclosed it had taken a $1.8 billion hit from a $21 billion fire sale of its bond holdings.
It faced a cash crunch due to surging interest rates, and a recent meltdown in the tech sector led many customers to pare their deposits.
Silicon Valley Bank went ‘woke’ and ended up broke. Is that the moral of the story? The bit about no risk assessment executive being appointed for the US for nearly a year does raise eyebrows; how can you not have this person on staff? There have been deafening calls for a bailout, which Treasury Secretary Janet Yellen has rejected. We’ll see how long that lasts, however.