I'm sure you saw the news about Silicon Valley Bank's (SVB) recent failure, but what you may not know is that it was already bailed out as a result of supporting Democratic candidates and politicians. While pundits on CNN and MSNBC would have you believe that the failure of SVB was due to loose regulations, the reality is that their failure was due to poor management and bad decisions made by SVB executives.
What you won't hear from the mainstream media is that many of SVB's executives were too distracted with pursuing diversity, equity, and inclusion initiatives instead of paying attention to their finances.
What is the point of pursuing DEI initiatives when you can hardly function as a financial institution? Instead of paying close attention to their internal numbers, it seems that SVB was too preocupied with creating a woke bank of the future to remain solvent.
The worst part? They've already been bailed out. While it's a good thing that customers were able to get their money from their accounts, it's ultimately detrimental for SVB to be bailed out instead of allowing them to fail on their own. Why should we reward the kind of risky behavior taken by SVB when they haven't demonstrated that they can be trusted to operate on their own?
I think I speak for the average American when I say that I'm tired of big banks getting off scot-free when they take unnecessary risks. If we are a nation where you're allowed to operate independently, then we should allow banks to fail when they take too great a risk.
If you'd like to read more about the special treatment enjoyed by SVB, please read this article from The Washington Examiner. An excerpt of the article has been copied below:
Tech executives who were big depositors in Silicon Valley Bank were bailed out by government regulators over the weekend.
SVB’s demise, the second biggest bank failure in United States history, has sparked demands for increased or different banking regulation. Yet it appears that the failure resulted not from weak regulations but from bad decisions by people blessed, like Stanford Law students, with high cognitive ability and ensconced in enviable institutional niches.
SVB executives, absorbing an inrush of deposits from Silicon Valley techies, decided to invest heavily in long-term bonds without hedging against the risk of higher interest rates — something that anyone who reads financial news saw coming. They did so even though 93% of deposits were above the $250,000 limit on Federal Deposit Insurance Corporation insurance. The predictable result was that when interest rates rose, depositors sensed weakness and rushed to yank their uninsured money out — a classic run on the bank.
