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FT: the spectacular unravelling of the tech industry’s banker

FT writes about Silicon Valley Bank:

“It turned out that one of the biggest risks to our business model was catering to a very tightly knit group of investors who exhibit herd-like mentalities,” said a senior executive at the bank. “I mean, doesn’t that sound like a bank run waiting to happen?”

Not really. By the end of the article we realize the senior executive and his colleagues were just plain incompetent, and that “the herd” was rightly concerned.

Ultimately, [SVB] committed a cardinal sin in finance. It absorbed enormous risks with only a modest potential pay-off in order to bolster short-term profits.

Give them the Ig Nobel Prize for economics!

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