According to Rep. Gary Palmer (R-AL), the chairman of the House Policy Committee, a focus on the so-called woke agenda instead of the traditional duties of banks was part of what led to Silicon Valley Bank (SVB) and Signature Bank’s downfall.
Palmer told Mobile, AL radio’s FM Talk 106.5 he did not believe it was a solvency issue but acknowledged there would be consequences.
“First of all, this is not a solvency issue,” he said. “This is a liquidity issue. I don’t think it is going to result in a run on the banks, but there are going to be some repercussions. I think the market is very skittish about this.”
The Alabama lawmaker pointed to SVB’s political leanings, which appeared to take precedence over responsibilities within the financial institution.
“What happened with Silicon Valley Bank were a couple of things that were, frankly, unbelievable to me,” Palmer explained. “First 0f all, they went nine months without a risk management person in the bank. And then, on the board, only one member of their board of directors had any banking experience. Their board was based on diversity, equity and inclusion. They were making some horrendous management decisions. They sent over $70 million to Black Lives Matter. The Silicon Valley Bank was maybe the leading bank in the country making loans to these green new deal types of companies who were notorious for not being able to turn a profit for years, if ever. They wound up with a major liquidity problem, and some of the same stuff is going on at the Signature Bank.”
“It was more about this woke agenda than managing the assets of the people who were banking with them,” he added.
Follow Jeff Poor on Twitter @jeff_poor
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