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Republicans blame Silicon Valley Bank collapse on its ‘woke’ agenda
Efforts to guarantee the deposits of SVB customers are becoming increasingly politicised
Republicans have tried to pin the collapse of Silicon Valley Bank on a “woke agenda” as the crisis becomes a new flashpoint in battles between US politicians.
Leaders including Ron DeSantis, a potential presidential frontrunner, claimed the bank became distracted by diversity and inclusion issues at the expense of sound financial management.
Josh Hawley, the Republican senator for Missouri, claimed SVB was “too woke to fail”.
Congressman Ronny Jackson said: “The woke agenda coming from SVB is in a large part to blame for their failure.”
Joe Biden has said that savings at the US bank will be fully protected, despite the vast majority of account holders at the tech heavy bank having more than the $250,000 (£205,000) protected by deposit insurance.
SVB previously said it planned to be carbon neutral by 2025 and hoped to “create a more just, equitable and sustainable world”.
The bank had also prided itself on its inclusion programmes, introducing diversity goals for senior leadership positions.
Its collapse has widely been blamed on billions of losses suffered after investments turned sour due to rising interest rates, triggering a bank run and liquidity crisis.
“This bank, they're so concerned with DEI [diversity, equity and inclusion] and politics and all kinds of stuff, I think that really diverted from them focusing on their core mission,” Mr DeSantis, the Florida governor, told Fox News.
Mr Hawley said: “So these SVB guys spend all their time funding woke garbage (‘climate change solutions’) rather than actual banking and now want a handout from taxpayers to save them.”
Prominent Democrats such as Elizabeth Warren and Bernie Sanders have attributed the bank’s collapse to regulations written after the financial crisis being rolled back during Donald Trump’s presidency.
California regulators took control of Silicon Valley Bank in the US on Friday after a collapse in its share price led it to abandon plans to raise cash to plug its ailing finances.
Janet Yellen, the US Treasury Secretary, has insisted that support for deposit holders, which will be paid out of a US insurance programme for deposits, does not amount to a bailout.
The row over the bank could hamper Mr Biden’s efforts to introduce stricter measures for banks in the Republican-controlled Congress.