All You Need To Know About SVB And Then Some

“Iceberg ahead,” shouted Martin Gruenberg, chairman of the Federal Deposit Insurance Corporation on March 6. “Full speed ahead,” responded Greg Becker, captain of the good ship Silicon Valley Bank. Only one member of his crew had experience sailing this kind of vessel, and the navigator (risk manager) job had been vacant for eight months in 2022, a fact announced only last week.

The ship has billions in unrealized losses, not recorded in the log book, weakening your ability to meet unexpected liquidity needs, responded Gruenberg. Replied the captain, just eleven days ago KPMG, our auditors, gave us a clean bill of health, and we rank 20 on Forbes list of America’s Best Banks. And we’ll strengthen the ship’s structure by raising $2.25 billion in new capital, replied the captain. He couldn’t. The government declared the ship unseaworthy, and beached it on March 10.