An email landed in Andrew Sinclair’s inbox. You’ve just been paid,” it read. Except, he hadn’t. The 51-year-old father of three, head of sales at the New York research firm Quill Intelligence, logged into his bank account and saw that no money had landed.
“My life runs pretty tight, so I look forward to my cheque,” he said.
Confused, he contacted Rippling, the start-up that handles payroll for his employer. Rippling didn’t respond, but on Twitter, he saw Rippling’s chief executive, Parker Conrad, had just tweeted a mea culpa.
More at WSJ – Where Were the Regulators as SVB Crashed?
Silicon Valley Bank’s failure boils down to a simple misstep: It grew too fast using borrowed short-term money from depositors who could ask to be repaid at any time, and invested it in long-term assets that it was unable, or unwilling, to sell.
When interest rates rose quickly, it was saddled with losses that ultimately forced it to try to raise fresh capital, spooking depositors who yanked their funds in two days. The question following the bank’s takeover Friday: How could regulators have allowed it to grow so quickly and take on so much interest-rate risk?
