SVB Management: HORRIBLE. Regulators? WORSE

If this story is credible, the tail was pinned on the donkey a year ago.

....BlackRock's final report, commissioned in October 2020 and submitted in January 2022, gave SVB a "gentleman's C," or a passing academic grade given to an otherwise failing student, according to the outlet. The bank was found to lag behind similar institutions on 11 of 11 factors, performing "substantially below" them on 10 out of 11.

The consultants also alleged that the bank was unable to generate real-time or even weekly updates about what was happening to its securities portfolio. SVB executives took in the criticism but turned down BlackRock's offer to do additional work, the outlet reports....

There are two targets here:  one is the management.  A clawback of all their options and bonuses is in order.

Related to both management and regulators (and FJB):  the loan portfolio.  

...“We serve those creating positive environmental change,” SVB’s website brags, noting that the bank worked with some 1,550 companies in the “climate technology and sustainability sector.”

Most of these companies weren’t filling some vital market need. Rather, as the Journal reported, SVB was beloved for its willingness to offer “banking services to startups that often weren’t profitable, in some cases didn’t have a product, and would otherwise have a hard time getting a line of credit or a loan from a larger bank.” One tech entrepreneur provided law.com a more scathing description of SVB’s products: “They’re basically subprime business loans. You’re talking about companies that have no credit profile, they’re burning cash and are unlikely to raise the same type of capital because of interest rates. . . . It was basically social credit.”...(Strasssel at Real Clear Politics)

We don't know what percentage of its total loan portfolio were 'social credits,' and we don't know how many of them were non-performing.  But it appears that these credits are NOT "bankable."

The other:  the regulators.  Never forget that Janet Yellen was the President of the San Fran Fed until a few years ago.  The Fed, FDIC, the Comptroller of the Currency, and California bank regulators were even worse than horrible.

But don't waste your breath calling for mass-firings.  They're Government bureaucrats.  Can't be fired.