NonDawg Silicon Valley Bank. Don’t care what you do never good to see a bank fail…
- Thread starter -lowcountrydawg
- Start date
Meh. The whole DEI thing is way overblown. Virtually every bank had tons of liquidity in 2021 and even through Dec 2022. SVB had over 35% liquidity on their balance sheet as of 12/31/22, which is far above a standard 10-20%. The issue is some of their depositors got spooked, they more than likely all knew each other and let each other knew what they were doing, and they tried to move their deposits as fast as they could. Not many banks can handle a 15-20% drop in deposits overnight. But when you have a concentration in the type of deposit customers you cater to, you create even more exposure to this than even your typical banks.
The bank's DEI focus comes into play for two glaring issues which were instrumental in the bank's failure.
First, although the firm talked about their strong DEI program and had a dedicated DEI Officer, the bank failed to employ a Risk Officer for most of 2022. Their former CRO stepped down in April of last year and was not replaced until January of this year. Turns out that was a critical time, as interest rates continued to rise, but SVB sat on long term, low interest investments with the majority of its assets. Someone should have addressed that a long time ago.
Second, for an institution founded on the principle of diversity, the overriding issue that showed up in multiple ways, was a lack of financial diversification.
Too many customers in the same industry
Too many high risk venture capital clients
A relatively short list of customers
Most loans to venture capital depositors
Too much of their assets tied up in T-Bills and Mortgage Backed Securities
Too much in deposits in too few accounts
In short, SVB had too much emphasis on social diversity, equity and inclusion, coupled with a reckless disregard for financial diversity, equity and inclusion (fundamentals of finance) - in a bank.
They made $2 billion in 2022. That $74 million didn't cause their downfall. It was $42 billion or more in deposits leaving them that crushed them and prevented them from being able to honor depositors's requests. They sold $20 million in securities to go with the maybe $10 billion they already had in cash plus they had lines of credit they could draw on and it was still going to be tough to maintain. As to the rest of their assets, they had a lot in HTM, which definitely hurt.
Tell me you don’t understand what happened without telling me you don’t understand what happened. Lol.
This whole thing is complete BS and a total lie. The actual amount SVB donated to BLM is $0.
Here is how the Claremount Institute (a right wing group) came to $73M. Their database tracks pledges to groups related to BLM, as well as "organizations and initiatives that advance one or more aspects of BLM's agenda." So, what were these initiatives of SVB? All from the Claremont database.
$50M came from an internal initiative to connect women, black people and Latinos with funding, networking and development in the VC ecosystem over 5 years.
$20M was donated to "support additional COVID-19 relief" and establish a "full-ride needs based scholarship" at four universities.
$400k was a "matching campaign for employees who donate money or time to social justice orgs"
$250k was for corporate donations to the ACLU and NAACP
I know where you copied this from. All the left leaning media lined up behind AP reporting BLM received no money as if they would know. However, their investigation was merely asking BLM if they received and money. Of course BLM would deny it. Otherwise, what other bank would make or continue to make donations?
But here’s Newsweek. Not exactly a Right leaning outlet.They qualify their statement by saying SVB donated “or pledged to donate” to BLM:
SVB Gave $74 Million to Black Lives Matter. It Explains a Lot
SVB became one of several high-profile corporations that exploited the murder of George Floyd to endear themselves to the public.
www.newsweek.com
