“Regulators shut down Silicon Valley Bank on Friday, in the largest U.S. bank failure since the 2008 financial crisis.” — The New York Times, 3/13/23
Look, I get it, I’m a bank, and with that comes certain expectations. That I’m good with money. That I’ll protect your money. That I know what money is and how it works. But those are outdated stereotypes. Nowadays, banks can be anything, including bad with money.
When you have the last name Bank, your future is pretty much mapped out for you. You go into the family business and do your best. And my best was mismanaging funds so egregiously that it shattered Americans’ confidence in the entire US banking system.
But before people start throwing stones at glass houses—houses that now teeter near foreclosure—ask yourself, are you good with money? Probably not. Because managing money is hard. It should be left to the professionals, whoever they are. It should not be left to me, someone who can’t balance their checkbook. I mean, who even uses a checkbook anymore? Certainly not me.
I should get some credit for knowing my weaknesses, which are risk management, monitoring capital, tracking interest rates, and knowing numbers. The willingness to accept your weaknesses is actually a sign of strength. Any attempt to change those weaknesses would undermine me as a person. And before you say corporations are not people, then I would remind you that a little thing called Citizens United said we are.
Haven’t we all made bad money decisions? Haven’t we all had a couple of glasses of wine, did some online shopping, and overdrawn our accounts? Haven’t we all bought stuff with credit cards and said, “That’s not real money.” Haven’t we all wildly miscalculated our interest rate risk, wiping out our entire equity? I think we can all agree we have.
Instead of focusing on what I’m not good at, let’s talk about what I’ve done right. No one gave me credit for starting my own business. You know 20 percent of all new businesses fail? That means, for a while, I was better than 80 percent of businesses. I may not be good at math, but those numbers don’t lie. I also gave people a lot of money to buy houses, cars, boats, diamonds, and companies. Some would say that is why I failed. But I don’t consider generosity a failure. If largesse is a crime, then lock me up—metaphorically speaking. I don’t really want to go to prison. And most likely I won’t, since Trump rolled back a bunch of banking regulations. Thanks for that, my dude.
Just because I won’t face any legal repercussions doesn’t mean life will be easy. Sure, the government will cover my debts, and taxpayers will pay for my mistakes, but I’ll always have the stink of failure on me. Look at all the other Banks that have taken government handouts. JPMorgan, Bank of America, Morgan Stanley, Goldman Sachs. Those guys were ruined. Not financially, but emotionally. I know they’ve never formally apologized, but you can see in their eyes how awful they feel about everything.
So I’m not good with money, big deal. Lots of people aren’t. And, yes, banks like me charge those people overdraft fees, repossess their cars and homes, and take them to court, squeezing them for every last penny. But I never liked doing that. Just like I never liked diversifying my assets or planning for long-term solvency.
I had a good run, especially given I failed to meet every single measure used to judge what a bank should be. But I’ll be okay. I’ll be bought, sliced up, divided off, and it’ll be like this whole thing never happened. Because honestly, what are the chances there are TWO banks out there that are bad with money?