The executive leadership of Silicon Valley Bank (SVB) knew for sure that the ecosystem of Silicon Valley entrepreneurs and investors would be staunchly loyal. For decades, the community valued SVB’s deep understanding of the local market and the bank’s long history of lending to emerging companies in the area. How could anyone question SVB’s stability, when its CEO sat on the board of directors at the San Francisco Federal Reserve, the body responsible for regulating his bank? Few imagined trouble could find a start at this bank—least of all, it seems, its own management. As it turns out, the idea that depositors won’t move deposits when risks appear and safer options with greater returns exist just ain’t so. Never has been.

The Long Run – April 2023