12:16 p.m. ET, March 15, 2023
Former Goldman Sachs CEO: ‘Smiling’ Banks Failed Because of Diversity
By Rob McLean of CNN
Customers line up in front of Silicon Valley Bank’s headquarters in Santa Clara, California on March 13.
(Brittany Hosea-Small/Reuters)
Lloyd Blankfein, senior chairman and former CEO of Goldman Sachs, said it was “ridiculous” that the Silicon Valley bank collapsed because it has minority board members.
During a conversation with Erin Burnett on CNN’s Erin Burnett Outfront Tuesday, Blankfein responded to a quote from Florida Gov. Ron DeSantis and a Wall Street Journal commented by Andy Kessler.
Desantis worried about “DEI [diversity, equity and inclusion] and politics”.
Meanwhile, Kessler wrote: “In its proxy statement, SVB notes that not only is its board 91% independent and 45% female, but also 1 Black, 1 LGBTQ+, and 2 Veterans.” I’m not saying 12 white men avoided this mess, but the company may have been distracted by calls for diversity.”
Rather than address prices directly, Blankfein said signs of the bank’s collapse were overlooked with hindsight.
“Banks publish the unrealized losses that are included in their portfolios,” he said. “It was there to be seen… It wasn’t seen as that dangerous because the bank didn’t have to sell any of those securities. But they certainly did when withdrawals started. And so, in hindsight, it will have looked like it was in sight and the signals will have been missed. But it only became critical when deposits were withdrawn and banks had to sell these out-of-the-money securities to raise funds.”
When Burnett again asked if the bank collapsed because it focused on putting a black man or a gay man on its board, Blankfein replied:
“I’m not an expert on crowd psychology, but I find that very unlikely and quite frankly I find it a bit ridiculous.”
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