Confessions of a Former SVB Executive

Among its myriad problems, SVB lost sight of the fact that it was… a bank.
Among its myriad problems, SVB lost sight of the fact that it was… a bank. Photo: Patrick T. Fallon/Getty Images
William D. Cohan
October 25, 2023

It’s been seven months since the spectacular collapse of Silicon Valley Bank, the third-largest bank failure in U.S. history. Since then, as best I can tell, there have been a handful of investigations detailing what happened and why: the so-called Barr Report, written under the auspices of the Fed’s Michael Barr, in April; reports by the State of California and the Bank Policy Institute, both released in May; the long-awaited conclusions of the Fed’s Office of Inspector General, in late September; and, most recently, a report led by Sheila Bair, at the Center for Financial Stability. (Bair, of course, was famously the head of the FDIC during the 2008 financial crisis.) 

It’s safe to say that while there are some technical differences, the Barr Report, the O.I.G. Report, and the Bair Report are largely in agreement that SVB’s management made the fatal mistake of failing to realize that the bank’s liabilities (its deposits) were short-dated and could flee the bank in an instant, while its assets (billions in long-term Treasuries and other bonds) were long-dated and could not be easily turned into cash, except at a discount, meaning big losses (as happened at the end).