On bank runs, mRNAs, and existential risk
It's not that we can't see the threats, it's that the people who should be worried are making too much money to care
On Thursday morning, Silicon Valley Bank was one of the 20 largest American banks, a solid, profitable financial institution with a market capitalization of over $15 billion.
A day later it was gone.
California and federal regulators closed Silicon Valley and seized its assets Friday morning, after a stunning bank run that threatens to spread. Not many people outside northern California have heard of the bank, but with $209 billion in assets, it is the second-largest bank in American history to fail, trailing only Washington Mutual during the 2008 financial crisis.
The reasons for Silicon Valley’s collapse are both complicated and simple.
But as we grapple with the fallout from the failure of the mRNA jabs and the rise of artificial intelligence, the bank’s overnight implosion proves - yet again - that we cannot always trust companies and their leaders to manage the risks they’re running.
Especially when they are making fortunes to take those risks. Silicon Valley’s chief executive officer, Greg Becker, made almost $30 million from 2020 to 2022, according to the company’s new proxy statement. Nice work if you can get it.
And doubly especially when someone else will pay the price if they lose.
(ANOTHER PAYWALL? YEAH, ANOTHER PAYWALL. SUE ME. OR SIGN UP!)