In the aftermath of the catastrophic collapse of the Silicon Valley Bank (SVB), new details have emerged revealing just how much the bank continued to double down on far-left “diversity” policies despite previously suffering losses to the tune of hundreds of millions of dollars.
As reported by Just The News, the transcript of an investors’ call that took place last July shows that some major investors were beginning to voice their concerns about the bank prioritizing politics over investors’ returns. While representatives from SVB used the call to boast about the company’s diversity, equity, and inclusion (DEI) measures as well as its commitment to gay pride, J.P. Morgan official Steve Alexopoulos demanded answers on one particularly devastating quarter’s losses.
“So if we look at the $137 million of investment losses, which are detailed on Page 7, that declines a bit more than we’ve seen in other periods, right, is over 8%, typically you’re like 2% to 3%,” Alexopolous said. “Can you walk us through the three buckets, so we can understand that a bit better?”
In response to Alexopoulos’ concerns, SVB’s President and CEO Greg Becker, simply said “I believe and I certainly hope we’ve kind of gotten down to the floor. No guarantees, but this is just a flavor for how we’ve approached the securities portfolio.”
Following SVB’s collapse over the weekend, the bank has been forcibly placed under the control of the Federal Deposit Insurance Corporation (FDIC), and Becker now faces multiple lawsuits over his mishandling of investors’ finances. The collapse of SVB, which was estimated to have at least $209 billion in assets at the time of its failure, is the second-largest bank failure in U.S. history, only behind the 2008 financial crash.
Since SVB’s failure, several commentators have pointed out that the collapse was most likely due to financial mismanagement, with the far-left politics contributing to such incompetence due to prioritizing policy agendas over smart financial decisions.
“We knew it was financially mismanaged, but oh my gosh, this is probably the most woke bank in existence of mankind — or it was the most woke bank,” said Joel Griffith, financial fellow at the Heritage Foundation. “We should recognize the primary cause of this bank going belly up was just gross financial mismanagement. They took depositors’ money, and they put this in long term debt investments at record low interest rates, and as any financial risk manager knows, if you have interest rates that increase, the value of those debt assets are actually going to decline.”
SVB’s collapse also led to the collapse of at least two other banks: Signature Bank in New York, and Silvergate Bank in California. The banking industry as a whole has seen a massive plunge in its stock market value since Monday as a result of the crisis, generating fears that the current recession in the United States could get even worse.