The collapse of SVB Financial Group SIVB has dominated headlines over the weekend, with many financial experts, venture capitalists and economists weighing in.
Even a potential presidential candidate shared his thoughts on the bank and what could happen next.
What Happened: Silicon Valley Bank was shut down on Friday by the California Department of Financial Protection and Innovation. The Federal Deposit Insurance Corporation (FDIC) was named as receiver for the bank. The company struggled to raise additional capital last week and saw account holders withdraw significant amounts of money leading to questions on liquidity. Shares were down significantly on both Thursday and Friday, before the stock was halted. With reports stating that the FDIC will hold an auction for Silicon Valley Bank assets, top voices like Bill Ackman are calling for the government to step in and help.
While Florida Governor Ron DeSantis has not yet declared he is running for president in the 2024 presidential election, he did
share his thoughts on the collapse of Silicon Valley Bank on Sunday.
“This bank, they’re so concerned with DEA and politics and all kinds of stuff, I think that really diverted from them focusing on their core mission,” DeSantis told Maria Bartiromo on “Sunday Morning Futures,” while noting that he didn’t have any similar information on certain Florida banks or any concern of a run on banks in the state.
“We have a massive federal bureaucracy, and yet they never seem to be able to be there when we need them to be able to prevent something like this. And so we’ll see what they do going into tomorrow,” he said.
The governor, who is widely predicted as a frontrunner in the presidential race should he announce his candidacy, called the collapse of Silicon Valley Bank disappointing.
“[It] kind of reminds me of stuff that we saw in the financial crisis or in Bernie Madoff, where you had warning signs and yet the government that this is supposed to be their job, and they always seem to whiff when it counts,” he said.
Related News: Roku Has 26% Of Cash With SVB Financial, Deposit Recovery Uncertain — 27 Other Companies With Ties To Collapsed Bank
Why It’s Important: DeSantis’ comments come as reports revealed that the head of risk management at Silicon Valley Bank had pushed several “woke” programs similar to ones that the governor has criticized. The New York Post reported that Jay Ersapah, the head of financial risk management at the bank’s U.K. branch, had launched several LGBTQ+ initiatives and created safe spaces.
“The phrase ‘you can’t be what you can’t see’ resonates with me,” Ersapah was quoted on the Silicon Valley Bank website. “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.”
Over the weekend, Home Depot co-founder Bernie Marcus was also critical of Silicon Valley Bank and its concerns over global warming and “woke issues.”
“I feel bad for all of these people that lost all their money in this woke bank. You know, it was more distressing to hear that the bank officials sold off their stock before this happened. It’s depressing to me,” Marcus said, citing insider transactions by SVB financial executives.
While many factors likely contributed to the collapse of Silicon Valley Bank and potential liquidity issues, many will point to the bank not focusing enough on risk management.
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