The committee is responsible for hiring, evaluating and terminating the CRO, and as of 2023, was made up of seven members.
Silicon Valley Bank was without an official Chief Risk Officer during a difficult transition in the venture capital market—the industry SVB services so closely..
SVB didn't have the cash on hand to liquidate these deposits because they were tied up in long-term investments.
They started selling their bonds at a significant loss, which caused distress to customers and investors.
Within 48 hours after disclosing the sale of assets, the bank collapsed..
On March 10, 2023, S&P Global Ratings lowered its issuer credit rating on Silicon Valley Bank to 'D' from 'BBB'.
We also lowered our issuer credit rating on SVB Financial Group, the non-operating holding company of Silicon Valley Bank, to 'CC' from 'BBB-'..
SVB's risk management framework was clearly deficient since it is evident that it did not effectively manage the bank's exposure to its funding risk, asset/liability mismatch risk, interest rate risk, funding liquidity risk and market liquidity risk..
Liquidity risk
Customers of SVB were withdrawing their deposits beyond what it could pay using its cash reserves, and so to help meet its obligations the bank decided to sell $21 billion of its securities portfolio at a loss of $1.8 billion.Mar 14, 2023.
Why didn't SVB hedge? We have talked about a couple of answers to that question: SVB had expenses, and it needed to make money.
It had to invest its depositors' cash to make that money..
