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And the $80 bill was about 40% of their assets. And their depositors are all businesses who will move the money out fast because it's not insured over 250k.
by danielmarkbruce 4y ago
And the $80 bill was about 40% of their assets. And their depositors are all businesses who will move the money out fast because it's not insured over 250k.
- disgruntledphd2 4y agoYeah, this is all very odd. What the hell happened there? In retrospect, the Chief Risk Officer leaving and not being replaced immediately was a bad sign: https://fortune.com/2023/03/10/silicon-valley-bank-chief-risk-officer/ https://fortune.com/2023/03/10/silicon-valley-bank-chief-ris...
- danielmarkbruce 4y agoThat's a good find... 100% speculation: the CRO told them loading up on long term bonds was crazy, and that they'd just have to eat lower earnings. The CEO/CFO disagreed, and the CRO didn't want to have any part of it. Hindsight is 20/20, but... this really was a disaster waiting to happen.
- james_barton 4y agoNot completely sure about that: "A risk officer typically anticipates and manages regulatory, operational, competitive or other risks faced by a firm." That looks like _non-financial_ risks. If that was the role of the CRO at SVB, the risk for this event probably should have been with the CFO?
- kortilla 4y ago“Operational” at a bank includes financial risks.
- james_barton 4y agoI know of at least one large European bank where it explicitly doesn't.