The economic narrative under the Biden administration just took another hit with the collapse of Silicon Valley Bank over the weekend. This is no joke, folks. The second-largest bank failure in American history has taken place, and the impact is being felt across the tech sector. Why was this not avoided, you might ask? It seems that the risk assessment manager in charge of this financial institution was not doing their job, leaving the bank exposed to huge losses as the market took a beating.
Silicon Valley Bank's chief risk officer stepped away from her role early last year, and the bank did not hire a replacement until this past January. https://t.co/4BTDOSQIl2
— FORTUNE (@FortuneMagazine) March 12, 2023
The Silicon Valley Bank was known for providing venture capital for tech entrepreneurs. However, they made a catastrophic announcement last week, stating that they needed to raise billions in capital to cover their recent losses. This set off a panic, leading to a 60% drop in the bank’s shares and ultimately, the government taking control.
Did Leaving This Key Position Vacant for Months Hasten Silicon Valley Bank's Collapse?
— Townhall.com (@townhallcom) March 13, 2023
What’s worse is that the bank had been without a Chief Risk Officer for months. This corporate officer is responsible for anticipating and managing risks that a firm may face, including regulatory, operational, competitive, or other risks. It is unclear how the bank managed these risks during this interim period, but it surely contributed to their downfall.
This collapse is a stark reminder of the importance of having competent corporate officers within financial institutions. It is disheartening to see the lack of oversight and leadership present in the banking industry, which ultimately led to the failure of Silicon Valley Bank under the Biden administration. It is time to take accountability and put measures in place to prevent further collapses of this magnitude.