Failure of the SVB, signature Banks More on this “woke agenda” than on asset management

According to Rep. Gary Palmer (R-AL), chairman of the House Policy Committee, focusing on the so-called woke agenda instead of traditional banking duties was part of what led to Silicon Valley Bank (SVB) and Signature Fall of the bank.

Palmer told Mobile, AL FM Talk 106.5 radio that he did not believe it was a credit issue, but acknowledged there would be consequences.

“First of all, it’s not about solvency,” he said. “It’s a liquidity issue. I don’t think it will lead to a run on the banks, but there will be repercussions. I think the market is very nervous about it.

The Alabama lawmaker pointed to political leanings at SVB, which seemed to take precedence over responsibilities within the financial institution.

“What happened with Silicon Valley Bank was a couple of things that were, frankly, unbelievable to me,” Palmer explained. “First of all, they went nine months without anyone in charge of risk management at the bank. And then on the board, only one member of their board had banking experience. Their advice was based on diversity, equity and inclusion. They were making horrible management decisions. They sent over $70 million to Black Lives Matter. Silicon Valley Bank was perhaps the nation’s leading bank lending to these new types of green businesses that were notorious for not being able to make a profit for years, if ever. They found themselves with a major liquidity problem, and part of the same is happening at Signature Bank.

“It was more about this woke agenda than managing the assets of the people who were doing business with them,” he added.

Follow Jeff Poor on Twitter @jeff_poor