Stocks fall sharply as bank fears consume global markets

The content originally appeared on: CNN
Costumers lineup outside of the Silicon Valley Bank headquarters in Santa Clara, California, on March 13. (Brittany Hosea-Small/Reuters)

Lloyd Blankfein, senior chairman and former CEO of Goldman Sachs, said it was “laughable” that Silicon Valley Bank collapsed because it had board members who belong to minority communities.

During a conversation with Erin Burnett on CNN’s Erin Burnett Outfront Tuesday, Blankfein reacted to a quote from Florida Governor Ron DeSantis and a Wall Street Journal op-ed by Andy Kessler.

Desantis blamed the bank’s collapse on its concern with “DEI [diversity, equity and inclusion] and politics.”

Kessler, meanwhile, wrote, “In its proxy statement, SVB notes that besides 91% of their board being independent and 45% women, they also have “1 Black,” “1 LGBTQ+” and “2 Veterans.” I’m not saying 12 white men would have avoided this mess, but the company may have been distracted by diversity demands.”

Instead of addressing the quotes head-on, Blankfein said that in retrospect, signs of the bank’s collapse were missed.

“Banks publish the unrealized losses that are embedded in their portfolios,” he said. “It was there to be seen… It wasn’t seen to be that dangerous given that the bank didn’t have to sell any of those securities. But they certainly did once withdrawals started to be made. And so, in hindsight, it will have appeared to have been in plain sight, and the signals will have been missed. But it became critical only when deposits were withdrawn and the banks needed to sell those out-of the-money securities in order to raise funds.”

When Burnett asked again if the bank collapsed because it was focused on placing a black person or a gay person on its board, Blankfein responded:

“I’m not an expert in mass psychology, but I think that’s very unlikely and I think frankly it’s a bit laughable.”