Keneci Channel
Silicon Valley Bank, SVB, America's 16th-largest bank, failed Friday after depositors hurried to withdraw money since the past week amid anxiety over the bank's health.
The crisis was sparked after SVB disclosed a $1.8 billion loss on its bold holdings this week. The revelation caused jittery clients to withdraw large balances to avoid any losses, even after CEO Greg Becker urged investors on a Thursday conference call to "stay calm" and not "panic." The California Department of Financial Protection and Innovation shut down the bank, and placed its remaining assets under the Federal Deposit Insurance Corporation, FDIC's control.
Federal authorities have since intervened with Treasury Secretary Janet L. Yellen approving measures enabling the FDIC to complete its resolution of SVB "in a manner that fully protects depositors," announced in a joint statement Sunday, by the Treasury Department, Federal Reserve, and the Federal Deposit Insurance Corporation (FDIC).
Depositors will have access to all of their money starting Monday, March 13. "Today we are taking decisive actions to protect the U.S. economy by strengthening public confidence in our banking system," the joint statement read. "This step will ensure that the U.S. banking system continues to perform its vital roles of protecting deposits and providing access to credit to households and businesses in a manner that promotes strong and sustainable economic growth."
The Federal Reserve said it would make additional funding available to "eligible depository institutions to help assure banks have the ability to meet the needs of all their depositors."
Authorities have also announced the shutdown of corrupt and failing New York-based Signature Bank.
"We are also announcing a similar systemic risk exception for Signature Bank, New York, which was closed today by its state chartering authority," the joint statement read. The bank is also being sued by shareholders for alleged fraud.
Dozens of customers were filmed over the weekend lining up outside an SVB branch to withdraw whatever cash they had to get out ahead of the fall-out. And police were called to the bank's headquarters after a group of disgruntled tech founders turned up on the doorstep.
Critics have pointed out that the collapse of SVB reflects the overarching financial policy malaise plaguing western markets, with businesses prioritizing costly and divisive woke initiatives -- like the so-called ESG, DEI and LGBTQ activism -- over efficiently fulfilling their fiduciary duties to investors and serving their customers.
SVB reportedly operated without a chief risk officer, CRO, between April 2022 and January 2023, even as the bank's executives ramped up all sorts of degenerate and costly woke initiatives. The bank's former head of risk, Laura Izurieta, who formerly performed a similar role for Capital One, left in April 2022. She wasn't replaced until January 2023 when the bank hired Kim Olson, formerly of Japanese bank Sumitomo Mitsui.
Becker credited Olson's "deep and multi-faceted financial services experience as a senior risk leader and former regulator and bank supervisor positions her perfectly to actively manage SVB’s financial and non-financial risks." According to the bank's website, the CRO reports to a seven-person committee made up of board members and the CEO.
However financial risk management appears of secondary interest to the executives' blatantly obnoxious woke priorities. Jay Ersapah, who acts as CRO for the bank in Europe, Africa and the Middle East and who describes herself as a "queer person of color from a working-class background" -- organized a host of LGBTQ initiatives including a month-long Pride campaign.
In a corporate video published nine months ago, Ersapah said she "could not be prouder" to work for SVB serving "underrepresented entrepreneurs."
Professional network Outstanding listed Ersapah as a top 100 LGTBQ Future Leader: "Jay is a leading figure for the bank’s awareness activities including being a panelist at the SVB’s Global Pride townhall to share her experiences as a lesbian of color, moderating SVB’s EMEA Pride townhall and was instrumental in initiating the organization's first ever global 'safe space catch-up,' supporting employees in sharing their experiences of coming out," her bio on the website states.
Silicon Valley Bank's implosion, was the second-biggest bank failure in U.S. history after the collapse of Washington Mutual in 2008.