How Woke leftists crashed Silicon Valley Bank
Go Woke, Go Broke: Loonie Lefties Crashed SVB Pursuing LGBTQ+ Agenda
Need one point out that these were not Russian, but AMERICAN banks that went belly-up?
Here are some earlier headines.
SVB Reportedly Paid Hefty Bonus to Employees on Day of FDIC Takeover
Hours before the Silicon Valley Bank’s (SVB) collapse on March 10, its employees received their hefty annual bonuses.
Even though the Silicon Valley Bank found itself between a rock and a hard place on Friday, after concerned investors withdrew a staggering $42 billion from its coffers, it nonetheless paid out annual bonuses to eligible US employees, Axios has learned from multiple sources.
The SVB, one of the top 20 US commercial banks operating since 1983, spiraled into a capital crisis and collapsed on March 10, making it the second biggest bank failure since the 2008 financial crisis.
According to sources, the California-based bank routinely disbursed employee bonuses on the second Friday of March. This year, the date coincided with the bank’s takeover by the Federal Deposit Insurance Corporation (FDIC).
While the amount of the bonuses is unclear, the US press cites Glassdoor – a website where current and former employees anonymously review companies – as saying that other SVB bonuses have ranged from about $12,000 a year for associates to around $140,000 for managing directors
How Wokeness and Negligence Sank Silicon Valley Bank Amid Global Perfect Storm
© AP Photo / Jeff Chiu
Silicon Valley Bank (SVB), the financial institution specializing in banking for tech startups since 1983, collapsed on Friday morning and was taken over by federal regulators. How has SVB sleepwalked into the financial trap?
The SVB was one of the top 20 US commercial banks – boasting $209 billion in total assets at the end of 2022 – until last Wednesday, when it announced that it had sold a package of securities at a loss, adding that it had to sell $2.25 billion in new shares to keep afloat.
The announcement caused a wave of panicked withdrawals being fanned by venture capitalists. Customers withdrew a whopping $42 billion in deposits by the end of Thursday. The bank’s stock went down, hurting other bank shares and prompting fears of a domino effect.
The SVB collapsed the next day, making it the second largest bank failure since the 2008 financial crisis. The California Department of Financial Protection and Innovation stepped in on Friday and appointed the Federal Deposit Insurance Corporation (FDIC) to take over the embattled bank.
Commenting on the SVB collapse, experts referred to a number of external factors. They largely blamed the Federal Reserve which has been aggressively raising interest rates to curb inflation. As a result, growing borrowing costs weakened tech stocks that had benefited the SVB. In addition, interest rate hikes eroded the value of long-term bonds that the SVB relied upon.
Finally, venture capital started drying up, forcing startups to withdraw funds held by the SVB. The bank simply could not handle the combination of losses in bonds and the high pace of customer withdrawals, according to the US press.
However, the Federal Reserves’ rate hikes policy was adopted in March 2022 and obviously did not come as a bolt from the blue for the SVB. Clouds have been gathering on the bank’s horizon for quite a while, prompting the question as to what the financial institution’s risk management had been busy with all that time
Go Woke, Go Broke?
While the world economy has been experiencing a perfect storm, the California-based bank’s leadership appeared to be focused on something more important than financial security, i.e. promoting a “culture of inclusion” and creating “equity in hiring, performance management, benefits, supplier diversity, donations and volunteering.”
To keep everyone ensured that the equity process is going on, the bank reported its “workforce diversity metrics” to its employees and board, and annually published the data on its website.
To complicate matters further, the US conservative press has revealed that the SVB operated without a chief risk officer (CRO) between April 2022 and January 2023. Laura Izurieta, the bank’s former head of risk, left the bank in April 2022. Somehow her position remained unfilled for nine months until when Kim Olson, formerly of Japanese bank Sumitomo Mitsui, took the reins of the risk office in January.
Meanwhile, on the other side of the pond, Jay Ersapah, the UK-based head of financial risk management for SVB in Europe, Africa and the Middle East, seemed distracted by her own agenda, pushing ahead with a vast variety of LGBTQ initiatives including a month-long pride campaign and a new blog raising mental health awareness for queer youth. She also served as director for Diversity Role Models and volunteered as a mentor for migrant leaders.
“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,” Ersapah was cited as saying on the company website.
Ersapah’s bio on the Outstanding website reads: “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.”
Nine months ago, SVB released a corporate video featuring Ersapah who said that she “could not be prouder” to work for the bank serving “underrepresented entrepreneurs.” All this at the time that no CRO was present at the California office and Ersapah, theoretically, should have been watching closely how the Fed’s aggressive hikes were eating away at long-term bonds the bank relied on and sucking the life from the world’s major currencies.
Florida Governor Ron DeSantis, who is rumored by the US press to kick off an unofficial presidential campaign, blamed the SVB collapse on the controversial “woke” culture. “This bank, they’re so concerned with DEI [diversity, equity, and inclusion] and politics and all kinds of stuff. I think that really diverted from them focusing on their core mission,” DeSantis told a US broadcaster.
“I also look at it and say we have such a morass of federal regulations. We have a massive federal bureaucracy and yet they never seem to be able to be there when we, we need them to be able to prevent something like this,” the Florida governor added in a clear reference to the Biden administration that has been pushing ahead with “woke” policies since Joe’s day one in the Oval Office.
Gentile’s Titanic Hit an Iceberg, Again
Meanwhile, another SVB executive, Joseph Gentile, has also come into the spotlight after the bank’s collapse. Before joining SVB as the chief administrative officer (CAO) in 2007, Gentile worked in the same position at Lehman Brothers’ Global Investment Bank before its infamous collapse in 2008. At that time, Lehman Brothers was one of the biggest banks that was forced to declare bankruptcy during the financial crisis.
Prior to going bankrupt in 2008, Lehman was the fourth-largest US investment bank, with $639 billion in assets and $619 billion in debt, according to the US media.
Gentile’s connection to Lehman Brothers has sparked a lively debate among US netizens with some jokingly saying that one “can’t make this up” and that SVB’s collapse is “starting to make sense now.”
Some US pundits are arguing that SVB’s collapse had nothing to do with Ersapah’s “wokeness” or Gentile’s record of being Lehman Brothers’ CAO. According to them, it was just bad timing, bad communication, and massive withdrawals in the first place. Probably, but what appears to be indisputable is that one of the bank’s executives was absorbed by something else rather than the institution’s security, while the other one seemed to completely overlook the fact that the SVB was left with no risk manager at the helm amid the global financial storm
Thiel’s Founders Fund Withdrew Millions From Silicon Valley Bank
Peter Thiel’s Founders Fund had no money with Silicon Valley Bank as of Thursday morning as the bank descended into chaos, according to a person familiar with the matter.
Founders Fund withdrew millions from SVB, said the person, who asked not to be identified discussing private information. It joined other venture funds that took dramatic steps to limit exposure to the now-failed financial institution. Founders Fund also advised its portfolio companies that there was no downside to moving their money away from SVB, even if the risk was low.
Founders Fund acted in other ways to move its business away from SVB. On Thursday, as the bank was beginning to unravel, the firm started what’s known as a capital call. That’s a run-of-the-mill activity in the venture capital world, in which a VC firm asks its investors, or limited partners, to send it money in order to make investments in startups — the core function of most VC firms. It began by asking those backers to transfer the funds to accounts at SVB, as it has done for years, the person said.
But the firm learned that its limited partners were encountering issues using SVB services as they tried to transfer the funds — they weren’t immediately going through as expected, the person said.
Quickly, Founders Fund asked its investors to transfer the money to other banks instead. The fund acted to ensure that startup funding deals that were slated to close in the coming days were not delayed, the person said.
SVB had NO head of ‘risk assessment’ for nine months before it collapsed… as woke boss for Europe, Middle East and Africa was busy organizing a month-long Pride campaign and a ‘Lesbian Visibility Day’
- The collapsed Silicon Valley Bank had no risk assessment head for nine months
- The bank’s previous head left in April 2022, her replacement wasn’t named until January
- While the bank’s European risk officer is accused of being more focused on diversity efforts
