Part 10/13:
The bank's management practices have also come under scrutiny. The absence of a chief risk officer for months during a critical period, combined with the sale of significant insider stock just weeks before collapse, paints a picture of poor governance. The fact that the bank was attempting to avoid downgrades from ratings agencies by hurriedly raising capital suggests a lack of transparency and mismanagement.
Additionally, SVB had been under threat of credit rating downgrades days before its failure, yet it still maintained an investment-grade rating—an indicator of underlying fragility. The situation underscores how quickly confidence can evaporate in a financial institution with structural weaknesses.