WSJ Wonders: Did Silicon Valley Bank Die Because One Black Person Was on Its Board?
Did Silicon Valley Bank implode because one (1) of its 11 board members is Black? Or because one (1) of those 11 board members is LGBTQ+? One of the nation’s most prominent economic columnists is wondering.
In a column for the Wall Street Journal, Andy Kessler writes: “SVB notes that besides 91 percent of their board being independent and 45 percent women, they also have ‘1 Black,’ ‘1 LGBTQ+,’ and ‘2 Veterans.’ I’m not saying 12 white men would have avoided this mess, but the company may have been distracted by diversity demands.”
One does not have to do much to imagine how a board of 12 white men would have acted; 10 of SVB’s 11 directors are white, all of them are rich, and the youngest is 53 years old. SVB's board, it should be noted, is less diverse than any of the United State's top five banks, according to their own annual reports.
There is, of course, literally no evidence whatsoever to suggest that SVB was “distracted” by diversity demands, and less than zero evidence that any token corporate interest in diversity led to its downfall. There is ample evidence to say, however, that while the story is complicated, the most important factor appears to have been the Trump-era rollback of various regulations put in place after the last financial crisis to prevent banks from imploding. All of the banks that have imploded so far were totally concentrated on highly speculative, overheated sectors of the economy (cryptocurrency and startups), and slammed into the brick wall of rising interest rates and the deleterious effects on securities they held when depositors panicked.
