Daniel Gilbert et al.: Silicon Valley Bank’s risk model flashed red. So its executives changed it. Focused on profits, leaders made decisions that foreshadowed the bank’s surprise failure

"'They thought they could never go wrong,' said a former bank official who spoke on the condition of anonymity to discuss internal business practices, recalling an internal stress test in late 2018 or 2019 that showed SVB could lose at least a third of its deposits over two years. Executives directed that that model also be reworked. 'If they see a model they don’t like,' the official said, 'they scrap it.'"

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"A week before the bank failed, in its annual report to shareholders, #SVB praised its top executives for an area of achievement: managing risk.

Becker, the CEO, had displayed 'strong leadership of the continued evolution of risk management.' Beck, the CFO, was credited for 'promotion of a strong risk culture.'"

#SVB #GregBecker #DanBeck #siliconvalleybank
https://www.washingtonpost.com/business/2023/04/02/svb-collapse-risk-model