Silicon Valley Bank had NO head of ‘risk assessment’ for nine months before collapsing

Collapsed lender Silicon Valley Bank operated without a chief risk officer between April 2022 and January 2023, while the UK-based CRO of the operation is accused of prioritizing initiatives to promote diversity over its core role.

This revelation comes after the company became the largest bank to collapse since the 2008 financial crisis – disclosing a $1.8 billion loss on its finances.

Laura Izurieta, SVB’s former chief risk officer who previously held a similar role at Capital One, left the bank in April 2022. She was only replaced in January 2023 when the bank hired Kim Olson, formerly of Japanese bank Sumitomo Mitsui.

While Jay Ersapah, who serves as CRO for the bank in Europe, Africa and the Middle East and describes herself as a “queer person of color from a blue-collar background,” organized a variety of LGBTQ initiatives, including a month-long Pride campaign and led “ Safe Space” catch-up appointments for employees.

In a corporate video released just nine months ago, she said she “couldn’t be prouder” to work for SVB and serve “underrepresented entrepreneurs”.

Jay Ersapah describes himself as a “queer person of color with a blue-collar background”.

Kim Olson, Silicon Valley Bank’s chief risk officer, took up her position in January 2023

According to a press release announcing Olson’s January hiring, she brought “30 years of experience in the financial services space.”

‘SVB has an impressive track record of solid growth and remains true to its strategy of serving the innovation economy. I look forward to leading SVB’s outstanding risk management team and continuing to build SVB’s risk management framework and capabilities in this important next chapter of the company’s development,” Olson said at the time.

The bank’s CEO, Greg Becker, recognized Olson’s ‘deep and diverse experience in the financial services space as a senior risk leader and former regulatory and banking supervisor, which positions her perfectly to actively manage SVB’s financial and non-financial risks.’

The bank’s website states that the bank’s CRO reports to a seven-member committee made up of board members and the CEO.

Meanwhile, professional network Outstanding listed Ersapah as one of the Top 100 LGTBQ Future Leaders last year.

‘Jay is a leading figure for the bank’s awareness activities, including being a panelist at the SVB Global Pride Townhall to share her experiences as a lesbian, moderating the SVB EMEA Pride Townhall and being instrumental in initiating the first-ever global ‘Safe Space Catch’ of the organization -up, which helps employees share their coming-out experiences,” reads her bio on the Outstanding website.

She adds that she is an “ally” of gay rights organization Stonewall and has written numerous articles to promote LGBTQ awareness.

These included “Lesbian Visibility Day and Trans Awareness Week”.

Separately, she was also praised in a Facebook post by the group Diversity Role Models, a charity that campaigns against homophobic, biphobic and transphobic bullying in UK schools.

In a corporate document for the bank, she said, “You can’t be what you can’t see” has always been a quote that stuck in my mind.

“As a queer person of color and a first-generation, working-class immigrant, there weren’t many role models I could ‘see’ growing up.

“I feel privileged to spread awareness of lived queer experiences, work with charities, and most importantly, create a sense of community for our LGBTQ+ staff and allies.”

Ersapah is from the UK, where she completed a Bachelors degree in Economics from the University of Warwick.

According to her Linkedin profile, she has worked for several high-profile names in the financial sector, including Citi, Barclays and consulting firm Deloitte.

She describes herself as “proven competence in demanding roles”.

Her profile also boasts of her “interpersonal skills,” “growth mentality,” and ability to lead “high-performing teams.”

Last year, she was featured in an SVB corporate video that allegedly flaunted her pro-LGBTQ credentials.

“At SVB, we make it our mission to make sure our customers, employees and partners feel heard and that their voice counts.

“From funding under-represented entrepreneurs to multiple employee groups, I couldn’t be prouder to work for a company like SVB.”

This weekend, critics slammed Ersapah’s apparent preoccupation with LGBTQ issues.

One Facebook user, Paul Tucker, wrote: “The [SVB] board of directors is full of diversity employees who are there for their woke references.

“They all have pronouns in their bios that are filled with corporate newspeak.

“The Head of Financial Risk and Model Risk Management was this weirdo: Jay Ersapah.

“This is what happens when you allow people to manage their money based on bright principles, rather than their actual skills and competencies.

“I hope the depositors of this failed bank enjoy all this diversity, because diversity is your strength, isn’t it?”

He signed the post: “Wake up, go broke.”

Another Twitter user said: “Head of Financial Risk at SVB Jay Ersapah may have been busy with more important projects at the bank, such as LGBTQ issues, rather than assessing risk.”

Panic shook the financial sector on Friday after the sudden collapse of the SVB.

The bank was sensationally shut down by the California Department of Financial Protection and Innovation, which placed its remaining assets under the control of the Federal Deposit Insurance Corporation.

The crisis was sparked after the company announced a $1.8 billion loss at its bold holdings this week.

CEO Greg Becker urged investors to “stay calm” and not “panic” in a conference call Thursday.

Greg Becker, President of the SVB, lobbied Congress in 2015 to reduce oversight of his bank

But it prompted nervous customers to withdraw large balances to avoid losses.

Deposits up to $250,000 are protected by federal law — but anyone with larger sums tied up now faces losing their money.

Dozens of customers were filmed yesterday queuing outside a branch to withdraw the cash they needed to get out before the fallout.

Meanwhile, police were called to the bank’s headquarters after a group of disgruntled tech founders showed up outside.

Source: | This article originally belongs to Dailymail.co.uk