The CEO Who Rode the Rocket Up
At the center of it all was CEO Greg Becker, an SVB veteran who had been with the bank since 1993 and led it from 2011. Becker wasn't just a banker; he was a creature of Silicon Valley, deeply embedded in the tech and venture capital ecosystem his bank served.
His leadership mirrored the industry's ethos: relentless, optimistic growth. As government stimulus and near-zero interest rates flooded the tech world with cash during the pandemic, SVB's deposits swelled. Instead of seeing this as a temporary surge to be managed cautiously, the bank, under Becker's watch, made a fateful decision. It poured tens of billions into long-term bonds, betting that interest rates would stay low. When the Federal Reserve began aggressively hiking rates to fight inflation, the value of those bonds plummeted, creating a massive, unrealized loss on paper. Becker later blamed the collapse on a "series of unprecedented events," but the Federal Reserve's own post-mortem called it a "textbook case of mismanagement."
The Empty Chair in the Risk Department
For a bank growing at a breakneck pace and making huge bets on interest rates, you would expect a seasoned expert to be constantly watching for danger. Yet, for eight critical months in 2022, Silicon Valley Bank had no chief risk officer (CRO). The previous CRO, Laura Izurieta, stepped down in April 2022. A successor, Kim Olson, wasn't hired until January 2023, just weeks before the bank's implosion. This vacancy occurred precisely as interest rates were climbing and the risks to the bank's strategy were becoming most acute. A CRO's job is to challenge the prevailing wisdom, to ask the uncomfortable "what if" questions, and to ensure the bank can survive a worst-case scenario. The absence of a dedicated, empowered executive in this role meant that key vulnerabilities, like the bank's massive exposure to interest rate changes and its reliance on a concentrated group of uninsured tech depositors, went unmitigated. The bank's risk committee meetings more than doubled in 2022, a sign of growing internal concern, but without a CRO, there was no one with the authority to force a change of course.
A Board Built for Connections, Not Control
A company's board of directors is meant to be the ultimate check on management, providing oversight and holding leadership accountable. A review of SVB's board, however, revealed a group that was exceptionally well-connected within the tech and venture capital world but appeared to lack deep, traditional banking risk management experience. While this composition was brilliant for attracting the startup and VC clients that fueled SVB's growth, it proved less effective for challenging a risky financial strategy. According to a Federal Reserve report, the board failed to oversee senior leadership and hold them accountable for managing basic interest rate and liquidity risk. While the board's proxy statements claimed a majority of directors had risk management experience, a closer look revealed none had previously served as a chief risk officer in a bank. They were experts in the world SVB served, but not necessarily in the complex mechanics of the banking they were supposed to be supervising.
The Clients Who Loved It to Death
Finally, the very people who made SVB a titan were also the agents of its demise: its clients. SVB wasn't a typical neighborhood bank; it was the financial hub for the tech industry. Its client base was highly concentrated among startups and venture capital firms, who often kept huge sums—far exceeding the $250,000 FDIC insurance limit—in their accounts to make payroll and fund operations. This tight-knit community, famous for its rapid-fire communication, became a vector for panic. When SVB announced a massive loss on its bond portfolio and a desperate plan to raise capital on March 8, 2023, the news spread like wildfire through VC circles and founder group chats. What followed was a modern, digitally-fueled bank run, with depositors attempting to pull $42 billion in a single day. The same network that had built the bank up tore it down with astonishing speed. The people outside the bank mattered just as much as those inside.
