Governor of Florida and darling of the U.S. Republican Party, Ron DeSantis says diversity, equity and inclusion (DEI) caused the fall of Silicon Valley Bank (SVB) which is headquartered in Santa Clara, California.
SVB has a reputation for lending to tech firms and many venture capital companies bank with it. Last week, early investor in Facebook Peter Thiel advised many depositors to pull their money from SVB which they did, causing a run on the bank.
SVB was invested in secure bonds but rising interest rates lowered the value of those bonds causing concerns about its liquidity position and depositors began to withdraw their money.
DeSantis believes SVB was too fixated on diversity and wokeness and not focused on the bank’s operations.
He said: “I mean this bank; they’re so concerned with DEI and politics and all kinds of stuff. I think that really diverted from them focusing on their core mission.”
The US government has moved in to protect depositors but has made it clear that owners, investors, and management of SVB should be held responsible.
DeSantis continued: “I also look at it and say we have such a morass of federal regulations. We have a massive federal bureaucracy and yet they never seem to be able to be there when we need them to be able to prevent something like this.”
It turns out that SVB donated or pledged US$74 million to groups related to Black Lives Matter (BLM) and promised US$5 billion to sustainable financing by 2027.
According to DeSantis, the left has hijacked big business and he sees no value in DEI and environmental social and governance (ESG)
“The left is trying to impose its agenda through all of our arteries in society including Corporate America,“ said DeSantis.
Of SVB’s situation, Republican Representative of Kentucky, James Comer said, “They were one of the most woke banks in their quest for the ESG type policy in investing.”
US Senator Josh Hawley from Missouri added: “ So these SVB guys spend all their time funding woke garbage rather than actual banking and now want a bailout from taxpayers to save them.”
Some on the political right are pointing out that for most of last year, SVB didn’t have a chief risk operator.
SVB’s Sustainable Finance Commitment statement did “introduce measurable diversity goals for its senior leadership positions to strengthen the hiring and talent development initiatives meant to create paths to professional advancement, especially for women, black/African American and Hispanic/Latinx individuals.”