This article was authored by Andy Puzder for FoxNews.com on April 10, 2023
The reasons for Silicon Valley Bank’s collapse are fairly obvious. The bank’s poor risk management strategy left it with insufficient cash to meet the needs of its largely tech sector customers base, which was particularly hard hit by rapidly rising interest rates. The important question at this point isn’t what happened, but why.
An article the Associated Press describes as part of its "effort to address widely shared misinformation," claims that there is "no evidence to support claims that the bank’s stated commitment to supporting and investing in diversity and sustainability efforts played a role in its demise." In conclusion, the article offers this quote from Peter Conti-Brown, a professor from the Wharton School of Business, – "SVB failed because its bankers were bad at being bankers, something that no extra time away from meetings about diversity would have fixed."
With all due respect to the AP, is it really "misinformation" to consider the extent to which SVB’s corporate focus on social issues may have taken management’s eye of the ball of actually running a successful business?
SVB’s bankers weren’t just "bad at being bankers" – they were inexplicably horrible at being bankers, ignoring a risk obvious to anyone who has ever seen Jimmy Stewart in the classic movie "It’s a Wonderful Life." That is, if a bank lacks sufficient liquid assets to meet its depositors’ demands for funds, it will fail.
Click here to continue reading the full article: https://www.foxnews.com/opinion/terrifying-reason-silicon-valley-bank-collapsed-threat-thousands-other-businesses