Silicon Valley Bank Proxy Shows Board’s Secret Yearlong Risk Panic

Silicon Valley Bank shocked investors and depositors last week by announcing a $2.25 billion capital raise to stabilize its balance sheet. The next day, its primarily venture capital tech customer base hurriedly withdrew a staggering $42 billion of cash deposits, leaving SVB in a negative liquidity position – not tenable for a bank.

As the news broke, pundits quickly pointed to the typical financial institution demise culprits – overly aggressive investments, interest rate spike quicksand, convoluted accounting and toothless regulators. While all likely contributed to SVB’s downfall, a closer look at its SEC filings reveals a massive risk management rhetoric-reality gap.