I wrote a letter to the editor of the @nytimes in response to @mikiebarb's The Daily episode on Monday covering SVB I'm sharing here, in the hopes that we see more depth and compassion going forward: I’m a big fan of the Daily — I’ve found no better way to get a 30 minute audio deep dive on a pressing topic. That said, Monday’s episode on Silicon Valley Bank left me quite disappointed. As a disclaimer: I run a small investment business with less than 50 clients which generates less than $1 million of annual revenue. We specialize in small, branded products companies that help consumers across America live healthier lives. We do not really touch the tech ecosystem, but we do bank with SVB for their customer service and knowledge of small investment firms, and last week had all of our accounts below FDIC limits when the news came out (we did not pull out our money). I share this context to offer a different side to this story than the NYT has thus far reported. Small businesses are the lifeblood of America, from local shops to innovative startups and all of the regional banks across the country who make their ambitions possible. When Michael allowed Emily to tell a story of “tech bros” and “entitled” elites bullying the federal government to guarantee their deposits, he failed to explore how fragile our system became this past weekend and how harmful these events would have been to small businesses. Citing SVB’s depositor base as 97% over the insured limit led your listeners to believe that this bank run only impacted billionaires and big companies, but last week that’s not who I saw frightened by this news. I saw small businesses worried about making payroll and employees worried that they wouldn’t be paid a salary they so depend on to support their families. While $250,000 is a pretty large checking account for an individual, it’s not enough operating cash for many businesses to take care of people (and their families) who rely on them. If families did not receive their paychecks because their employer lost access to their funds, it would likely feel like a disproportionate cost to teach the executives and shareholders of SVB a lesson. Banks fail all the time, but not from 24 hour bank runs. No bank can survive a bank run at that pace, not even JPMorgan Chase, but what differs between regional banks and large Systemically Important Banks (SIBs) is that the government has shown precedent to backstop the latter at all cost. Emily did a great job explaining the bad interest rate risk SVB took which sparked last week’s events, but make no mistake it was the bank run (not the interest rate losses) that killed SVB. Regulators exist in our country to hold people accountable for wrongdoing and to incentivize behavior towards the greater good. On accountability, the executives and shareholders of SVB took silly risks and should be wiped out (as they were); but putting depositors at risk means punishing those who did not participate in the run on the bank (and rewarding those who panicked and fled). On incentives, if your deposits are safe at an SIB but vulnerable at a regional bank, your rational incentive is to pull out of the regional bank and move to an SIB. In the short term you are incentivizing bank runs and in the long term you are incentivizing the demise of the regional banking system that serves small businesses across the country much better than JPMorgan ever could. I’ve heard so many people point fingers for last week’s events to fuel a convenient narrative: from this being a symptom of “wokeness” inside SVB to this being a government “bailout” of the tech billionaire elite. These narratives lack context, credibility and compassion to many of the people that were actually put at risk here: the small business owners and employees, and regional bank employees who drive our economy. I expect more of the Daily and the New York Times, and hope you can do better in covering the layers and complexity of the story.

Today's Women of Bryant: alumnae Jaime Diglio ’00 and Emily Cisek ’11, who shared their unique perspectives at this past weekend's TEDxBryantU. bit.ly/3YubpcL

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