Was it the result of Trump-era regulation rollbacks, risk mismanagement at the bank, sharp interest rate rises – or a combination of all three?
SVB’s chief executive, Greg Becker, argued before Congress in 2015 that the $50bn threshold was unnecessary and his bank, like other “mid-sized” or regional banks, “does not present systemic risks”.
Early SVB shareholder lawsuits are said to be looking at the key vacancy, especially as the board’s risk committee was meeting frequently before the bank collapsed. But the bank’s loans to community and environmental projects were not central to its collapse nor are its diversity, equity and inclusion policies dissimilar to other banks. The argument also fails to take into account all the banks that existed in 2008, before DEI or “woke” became a part of corporate or political discourse.
Goldman Sachs has raised its prediction for a recession in the next year to 35%, partly as a result of lending drops by regional banks.
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