Well, well, well, it seems the collapse of Silicon Valley Bank (SVB) has brought a certain individual back into the spotlight. Joseph Gentile, the bank’s Chief Administrative Officer, has been making headlines due to his past involvement with Lehman Brothers, the global finance firm that famously went bankrupt during the 2008 financial crisis. Yup, you read that right, the same guy who used to be Lehman Brothers’ Chief Financial Officer (CFO) is now at the center of attention in the SVB debacle.
SVB, once the premier financial institution for tech and health startup businesses in the US, has been in a rapid downward spiral since Friday, with customers starting to withdraw their deposits due to the bank’s investments being adversely affected by recently hiked interest rates.This led to California regulators handing over control of the bank to the Federal Deposit Insurance Corporation (FDIC) and a bid for its assets now underway. Ouch. But back to Gentile. Twitter has been abuzz with comments and takes on his involvement with SVB, with some likening the bank’s collapse to the 2008 crisis, while others have taken a more humorous approach. “Just in case you thought you were bad at your job, Silicon Valley Bank’s Chief Administrative Officer Joseph Gentile was the former CFO of Lehman Brothers,” tweeted Stock Talk Weekly. Neither Gentile nor SVB has commented on the situation, leaving many to speculate on what led to the bank’s downfall and what this means for the tech and health startup businesses it once served.Alf (not that Alf), the founder of The Macro Compass, had some pretty harsh words for the way they’ve handled things. Spent hours going through SVB’s financial statements and changed my mind on the topic. “These guys weren’t bad at risk management. They were outright horrific. They literally gambled billions away,” he said on Twitter. Either the level of incompetence was extreme, or a gigantic amount of moral hazard was at play. I think the latter, and if I am right this is really f*cked up.”
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