SVB collapse: Employees blame remote work, focus on social issues for bank collapse

FFor the bank’s failure, the victims were primarily blamed for their remote work, over-focus on social problems, and poor risk management.

Analysts are criticizing the bank’s culture of work amid the collapse and potential loss of financial institution. The bank was not as competitive or strict as its peers, according to a report. Financial Times report. Employees had a wide range of answers to the question of what was the main problem with the bank’s culture. However, the most common response was that of the widespread use of remote work and its impact on productivity.

DID SILICON VALLEY BANK PRIORITIZE SOCIAL JUSTICE OVER RISK MANAGEMENT

“It is harder to have a challenging call over Zoom. It makes it harder to challenge management,” The outlet was informed by Nicholas Bloom, a Stanford University professor. “Ideas like hedging interest rate risk often come up over lunch or in small meetings.”

Employees pointed out that the management was scattered across the country. Chief Executive Greg Becker worked from Hawaii, President Michael Descheneaux from Florida, Chief Risk Officer Laura Izurieta, from Washington, and Mike Zuckert, from New York. The employees were similarly distributed.

“Some people worked from Miami, some moved to Las Vegas or a cabin in the woods and did the digital nomad thing,” An ex-banker spoke to the outlet.

Another issue was leadership’s emphasis on cultivating an environment. “empathetic” Culture that fails to prioritise risk management

“This is a West Coast bank that operates at the heart of innovation and is … empathetic and dependent on relationships,” An ex-executive said it. “It is not cutthroat like Goldman Sachs.”

In agreement with the complaints made by prominent Republicans, employees also complained about the lack of social justice at work.
expense of more urgent topics

“I almost felt like I was at work on a college campus,” An ex-executive recalled that weekly mandatory watching was mandatory “TED talks” on social problems. On occasion, employees were required to take classes. “how to make sure you were not committing a microaggression.”

“It was not the abrasive, roll-up-your-sleeves culture of Wall Street. … Working at SVB felt more like working at a tech company than it did like working at a bank,” A former banker stated this.

“There was an overemphasis on things that weren’t important and not enough on things that are,” A senior executive was added.

The issue of “overengineering” Employees blamed the bank’s problems on the funding of costly consultants.

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“It felt like a lot of decision makers were relying on consultants in order to make decisions,” Another ex-executive said it. “It felt like a lot of overengineering to get to [answers] that people ought to have figured out on their own.”

SVB’s collapse was the most severe since the 2008 financial crisis. It has sent shock waves through global financial systems.