To build on this and to show that it has truly committed to
new behavior, the Fed will have to accomplish a few more tasks. Given the
behavior of SVB management in the period leading up to the crisis, with the CEO
selling $4 million in stock on or around February 28th just weeks
before his bank collapsed, an effort to claw back the proceeds of any stock sale taking
place less than 60 days before the collapse should be initiated.
News reports also indicate that management received bonuses
in the days leading up to the collapse. These should be clawed back, too.
Further, one key to the collapse was a run on the bank
accelerated by certain key influencers and advisors, specifically Peter Theil
and his Founders Fund. A complete investigation of this situation should be
undertaken, with Mr. Theil being held accountable and forced to repay the
Treasury for any damage caused by his role in the bank run.
Finally, this is a fast-moving situation, with consequences
and impacts that have yet to be fully understood. We believe the failure of SVB
has significant implications for the US defense industry. Artificial Intelligence
(AI), autonomous fighting vehicles, and other important technologies are being
developed by tech firms affiliated with or customers of the bank. In the UK, HSBC
acquired SVB's British unit for £1. Note that HSBC originally stood for the
Hongkong and Shanghai Banking Corporation, meaning the bank is now Chinese. Giving
a Chinese bank insider access to critical defense related technologies is
shortsighted and dangerous. Having the US pay, via guarantees and subsidies that
make SVB’s depositors whole, is foolish.