New revelations have surfaced regarding Silicon Valley Bank (SVB) following its catastrophic collapse, indicating the bank persisted with its far-left diversity policies despite suffering hundreds of millions of dollars in losses.
According to House Oversight Committee chairman James Comer (R-KY) in an interview with Fox News host Maria Bartiromo, Silicon Valley Bank (SVB) continued to pursue far-left “diversity” policies despite massive losses.
Comer referred to SVB as one of the most “woke” banks, with a focus on ESG (environmental, social, and governance)-type investing. He suggested that these are the consequences of bad Democratic policy.
James Comer on SVB Bank:
"They were one of the most woke banks" pic.twitter.com/XRZMNSfCg3
— Citizen Free Press (@CitizenFreePres) March 12, 2023
Governor Ron DeSantis (R-FL) also commented in a segment on Fox News, “I mean, this bank, they’re so concerned with DEI and politics and all kinds of stuff,” said the Florida Republican. “I think that really diverted from them focusing on their core mission.”
Last July, an investor call transcript revealed that some major investors had expressed concerns about Silicon Valley Bank prioritizing politics over returns for investors. During the call, SVB representatives boasted about the company’s DEI measures, while J.P. Morgan official Steve Alexopoulos pressed for answers on significant losses in one quarter.
According to the transcript, Alexopoulos said, “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, it’s over 8%, typically you’re like 2% to 3%. Can you walk us through the three buckets, so we can understand that a bit better?”
SVB’s President and CEO Greg Becker responded to Alexopoulos’ concerns about the bank’s quarter losses saying, “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.”
Joel Griffith, financial fellow at the Heritage Foundation, said, “We knew it was financially mismanaged, but oh my gosh, this is probably the most woke bank in the existence of mankind, or it was the most woke bank.”
“We should recognize the primary cause of this bank going belly up was just gross financial mismanagement. They took depositors’ money, and they put it 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,” Griffith added.
The Federal Deposit Insurance Corporation (FDIC) has taken control of SVB after its collapse over the weekend, and Becker is facing multiple lawsuits over allegations of mishandling investors’ finances.
SVB’s collapse is the second-largest bank failure in the history of the United States, with assets estimated to be at least $209 billion at the time of its failure, second only to the 2008 financial crash.