If you run the 16th largest bank in the United States into the ground, it will be a challenging hole to dig out of professionally. Silicon Valley Bank is making moves after the federal government seized it on Friday. A new CEO was named, and the old one was blasted by employees who suggested he should make sure the word “idiot” is front and center when he updates his Linkedin profile.
The new boss is Tim Mayopoulos, who is described as a “veteran financial manager.” Hopefully, that means competent because he inherited a mess. He has experienced a crisis before — he joined Fannie Mae right after the 2008 financial crisis and became the CEO. He turned Fannie Mae around and made it profitable.
He fired off an email to customers assuring them it’s “business as usual” at the bank branches. I guess time will tell if that is the case. The good news is that customers can get their money if needed. The SVB website was updated and said, “Silicon Valley Bridge Bank, N.A. is a newly created, full-service FDIC-operated ‘bridge bank.’ The bank is open for business, and new and existing depositors have full access to their money.”
The previous CEO Greg Becker now has full access to some scathing reviews courtesy of his former employees. They can’t stand the guy and feel he was clueless when the pressure was on, not acting with enough urgency when things were dire.
The beginning of the end for the bank came in February when Moody’s was planning on downgrading their credit rating. Becker’s reaction to that is what’s being blamed for the bank’s collapse. Becker and company said on March 8 that they would shore things up to prevent Moody’s from downgrading them, but customers panicked and made a run for their funds.
Jeff Sonnenfeld is the CEO of the Yale School of Management, and he told CNN that Becker’s tone-deaf reaction doomed the bank.
‘Someone lit a match, and the bank yelled, ‘Fire!’ – pulling the alarms in earnest out of genuine concern for transparency and honesty.”
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