What does ‘wokeness’ have to do with Silicon Valley Bank collapse?

The United States is staring at a banking meltdown after the collapse of Silicon Valley Bank (SVB), a financial institution specialising in banking for tech startups since 1983. The situation prompted US President Joe Biden to state on Monday that his administration would take all action to ensure the safety of the US banking system. SVB’s collapse , the second largest bank failure since the 2008 financial crisis, unsurprisingly has also led to Republicans and Democrats to turn it into a political football. Democrats such as the president himself, Bernie Sanders and Elizabeth Warren blame former President Trump, as he rolled back parts of the Dodd-Frank Act, which provided regulatory relief for midsized banks such as SVB, in 2018. However, the Republicans have diagnosed the failure of Silicon Valley Bank to ‘wokeness’. Republican Congressman James Comer, in fact, told Fox News on Sunday, “They were one of the most woke banks. “We see now coming out that they were one of the most woke banks in their quest for the ESG [environmental, social, and governance] — type policy and investing. This could be a trend and there are consequences for bad Democrat policy.” We take a closer look at the origin of the term ‘woke’ and examine how wokeness has been liable for SVB’s failure. Woke, defined First things first: What is being woke? How is this term defined? According to Merriam-Webster’s dictionary, the term woke, is chiefly US slang and is defined as “Aware of and actively attentive to important facts and issues (especially issues of racial and social justice).” Woke nowadays refers to being aware or well informed in a political or cultural sense, especially regarding issues surrounding marginalised communities — it describes someone who has “woken up” to issues of social injustice. The earliest usage of woke in this politically aware sense can be traced back to a 1962 New York Times Magazine article written by William Melvin Kelley, titled If You’re Woke You Dig It. The use of the word reached mainstream vernacular when the Black Lives Matter movement used the hashtag #staywoke following the murder of Michael Brown in Ferguson, Missouri by police in 2014. With time, woke acquired two meanings, depending on which ideology you subscribe to. For the Left, to be woke means to identify as a staunch social justice advocate who’s abreast of contemporary political concerns — or to be perceived that way. However, those on the right, believe that woke is when ‘political correctness’ has gone awry. [caption id=“attachment_12288912” align=“alignnone” width=“640”] Destroyed SVB (Silicon Valley Bank) logo is seen in this illustration. Reuters[/caption] SVB and its ‘wokeness’ It is been reported that SVB focused on inclusivity and corporate diversity. Since the collapse, it has now emerged that the bank operated without a Chief Risk Officer (CRO) for almost nine months between April 2022 and January 2023. Moreover, the boss of Financial Risk Management at SVB’s UK branch, Jay Ersapah, has been accused of prioritising pro-diversity initiatives over her actual role. While Ersapah acted as the CRO for Silicon Valley Bank in Europe, Africa, and the Middle East, she organised a range of LGBTQ+ initiatives, including a month-long Pride campaign and “safe space” for staff. In its ESG (environmental, social and governance) 2022 report, SVB said that it strove to ‘create a more just, equitable and sustainable world’. Among the initiatives included in that report were a ‘commitment to provide at least $5 billion by 2027 in loans, investments and other financing to support clients’ sustainability business. Also read: Will Silicon Valley Bank collapse impact India? Additionally, it ‘introduced measurable diversity goals for its senior leadership positions to strengthen the hiring and talent development initiatives meant to create paths to professional advancement, especially for women, black/African American and Hispanic/Latinx individuals.’ The report then added that the bank even created its own program ‘designed to advance inclusion and opportunity in the innovation economy, particularly for women, black/African American and Hispanic/Latinx individuals.’ Republicans ‘woke’ attack’ While most would argue that SVB’s historic collapse was likely the result of a host of compounded factors, the Republicans and Conservatives differ — focusing on the bank’s culture than balance sheets. Florida’s Republican Governor Ron DeSantis, a likely presidential candidate for 2024, said on Fox News’ Sunday Morning Futures: ““They’re so concerned with diversity, equity, & inclusion (DEI) and politics and all kinds of stuff. I think that really diverted from them focusing on their core mission.” He had last month backed legislation to ban what he called “the woke ESG financial scam.”

Representative Marjorie Taylor Greene, another Republican, also offered a similar assessment for SVB’s collapse. On Twitter, she wrote: “The fools running the bank were woke and almost became broke, but the Democrats and the Fed swooped in to make sure their woke donors at SVB didn’t go under.”

Donald Trump Jr, son of former US president, also tweeted on the same lines over the weekend.

Republican Senator Josh Hawley, Missouri, said, according to a report by NBCNews, he plans to introduce legislation to prevent consumers from paying any fees that might be raised on other banks to pay for the “woke bailout.” Former Trump adviser Stephen Miller also called on House Republicans to subpoena SVB officials to learn how much time and money was spent on the “scams” of environmental, social and governance (ESG) and diversity, equity and inclusion (DEI) initiatives. Home Depot co-founder Bernie Marcus, who is an active Republican donor, asserted on Fox News that “everybody is focused on diversity and all of the woke issues and not concentrating on the one thing they should, which is shareholder returns.” Fox News presenter Tucker Carlson , a favourite among the Republicans, suggested on Friday that the bank was too focused on hiring “pioneering glass-ceiling-shattering women” and “yammering on about racial equity.” Interestingly columnist Andy Kessler in a piece written for the Wall Street Journal also suggested the same. He wrote, “SVB notes that besides 91 per cent of their board being independent and 45 per cent 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.” While these claims are gathering steam, the point is that SVB’s collapse had nothing to do with “wokeness”. With inputs from agencies Read all the Latest News , Trending News , Cricket News , Bollywood News , India News and Entertainment News here. Follow us on Facebook , Twitter and Instagram .