I have seen some unfortunate postings on social media and in the news. Self-appointed experts telling us what happened, why, and whose fault it was.
There’s a political battle going on as well, with people blaming federal government administrations, regulators, and so on.
I’m not going to get into that.
But I think it is important for governance, risk, and audit practitioners to understand the situation and its implications.
Here are some of the better pieces to read:
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Excerpts from Fortune:
“I think this is a colossal failure in asset-liability risk management,” Mark T. Williams, a former bank examiner for the Federal Reserve, tells me.
Williams is referring to actions that led to Silicon Valley Bank’s seizure by federal regulators on Friday following a bank run. It’s being deemed the largest institutional failure since the 2008 financial crisis. SVB is a major lender for the tech and venture capital sectors. But the bank didn’t have a chief risk officer for about eight months, Fortune reported.
SVB’s parent company, SVB Financial Group, disclosed on March 8 its big bet—it sold $21 billion of bonds, resulting in an after-tax loss of $1.8 billion for the quarter, Fortune reported. Many of those bonds were yielding an average 1.79%, far below the current 10-year Treasury yield of…
