SVB’s Loans to Insiders Tripled to $219M Before It Failed

bloomberg.com

42 points·mfiguiere··8 comments

> Loans to officers, directors and principal shareholders, and their related interests, more than tripled from the third quarter last year to $219 million in the final three months of 2022, according to government data.

So much for the interest rates and dumb executives narrative…

That narrative was basically the same as Sam Bankman Fried claiming he didnt know about fraud at FTX

The bank had over 200 billion in assets. Would 200 million even be more than a counting error when a bank run happens?

Because they have a fiduciary duty to their depositors, not themselves. If you control a bank, you make sure that every cent is where it's supposed to be, and that your customers are taken care of first.

Naturally and I doubt anyone would argue otherwise. My point being that OPs comment, about the size of a rounding error was the real reason for the bank going bust, seems highly unlikely.

loans to insiders is a form of payment when stock is expected to fail, or the company is expected to get bought out and those folks to get fired.

I do not think it is 'kosher' by any means... but this practice exists in western societies where corruption is hidden behind 'book deals', 'documentary deals', incredibly 'visionary' stock market investors (that sit in US congress and senate), etc.

In other places, same corruption -- but not hidden behind the financial instruments

We saw this exact behaviour here in Iceland, in some of the banks that went down during the '08 financial crisis.

Years of legal battles ensued.

So what's to stop the gov't from demanding repayment, or in the absence of immediate repayment, saddling "loan" recipients with appropriate collectable debt ?

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