Failed Silicon Valley Bank (SVB) has been hit with accusations that it was hyper-focused on so-called diversity, equity, and inclusion (DEI) initiatives and generally managed poorly.
SVB, a top 20 bank relied upon as the go-to for many tech startups, collapsed over the course of some 40 hours last week, culminating with the California Department of Financial Protection and Innovation closing it on Friday and naming the Federal Deposit Insurance Corporation (FDIC) as the receiver in an effort to protect its clients.
“This bank, they’re so concerned with DEI and politics and all kinds of stuff, I think that really diverted from them focusing on their core mission,” Florida Republican Gov. Ron DeSantis told Fox News on Sunday.
SVB reportedly failed to have someone in charge of risk assessment for some eight months, until January of this year, while the person in charge of risk assessment in the U.K. allegedly prioritized “pro-diversity initiatives” while neglecting her actual role, according to a Daily Mail report.
The bank has pages on its website dedicated to showing off its DEI initiatives and “workforce diversity.”
“An inclusive workplace expands opportunities for everyone,” the site reads, captioning the charts below. “SVB benefits from a diverse workforce and we aim to continue to increase diverse representation at all levels of the company.”
Jay Ersapah, Chief Risk Officer for the SVB in Europe, Africa and the Middle East, describes herself as a “queer person of color from a working-class background” and organized LGBTQ initiatives, including a month-long Pride campaign, the Daily Mail report outlined. Ersapah also implemented so-called safe space catch-ups for staffers and boasted of serving “underrepresented entrepreneurs.”
SVB announced Wednesday it was being forced to sell a large amount of securities at a loss, which raised concerns among venture capital firms and startups about the safety of its assets. Depositors rushed to withdraw money, sparking a run on the bank.
Some have blamed the bank’s collapse on the Federal Reserve’s interest rate hikes. The Wall Street Journal noted that the rate hikes had caused the value of existing bonds with lower payouts to fall in value, translating to giant unrealized losses for some banks. Others say the rising interest rates are no excuse, and the bank had plenty of time to prepare.
President Joe Biden and other Democrats have blamed former President Donald Trump for signing a bipartisan bill that lifted some banking regulations.
Treasury Secretary Janet Yellen on Sunday issued a joint statement with the Federal Reserve and the FDIC announcing a resolution that “fully protects all depositors,” offering SVB clients access to all of their money starting Monday at no expense to the taxpayer.
The statement noted that shareholders and “certain unsecured debt-holders” will not be protected and senior management has been “removed.”
Related: Biden Claims His ‘Quick Action’ Saved Banking Industry, Blames Trump For Banks Collapsing