(02-08-2025, 11:17 PM)chrisk Wrote: Former execs comment on SVB collapse
https://fortune.com/2024/10/13/chasing-y...ate-hikes/
Lots of comments from Ken Wilcox, the CEO just prior to Becker. He grew the bank from $4 bils. to $20 bils. by focusing exclusively on tech lending (prior CEOs lent to real estate, churches, etc.). Made sense. And Ken's personality, shall we say, was similar to that of engineers. I could see a comfort level there.
I agree with everything Wilcox said in the article except for:
“By God, the regulators, practically—when you’re as big as they were in 2023—they’re living with you, and they know everything you’re doing,” Wilcox said, adding: “They knew, trust me, that the long term bond portfolio was growing … so why didn’t they tell Greg?”
Yeah. First...everyone, particularly the former Chief Risk Officer had advised Becker against chasing yield, the enormously stupid bet that doomed the bank. Second...my guess is that regulators repeatedly informed Becker and all 17 people named in the lawsuit that their investment strategy was cataclysmic. Third...week 1 of a Finance 101 class, you learn not to acquire long-term, low-performing assets when interest rates are rising. It's what doomed the S&Ls.
Becker knew what he was doing. He was just colossally stupid.
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