Following the collapse of Silicon Valley Bank, reviews of the company’s internal practices have revealed that loans to insiders tripled to $219 million before the bank failed.
as a result of a $42 billion bank run from investors and depositors. The bank’s internal problems have come to light due to the collapse, and regulators are starting to look closely at the bank’s operations before its demise.
While there are no allegations of wrongdoing in connection with the insider loans, the Federal Reserve and Congress’ investigation into Silicon Valley Bank’s collapse, the biggest U.S. bank failure in more than a decade, may bring attention to the surge in lending to high-ranking individuals.
Additionally, the bank shifted its lending strategy to target bigger borrowers, such as venture capital and private equity clients. SVB Financial Group’s annual report for 2022 revealed that loans to clients who received at least $20 million made up about 63 percent of the company’s lending portfolio.
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