Following the collapse of Silicon Valley Bank (SVB), outlets across the spectrum sought to explain what caused the largest bank failure since 2008.
While financial explanations were mostly consistent across the political spectrum, some right-rated outlets linked SVB’s collapse to the bank’s purportedly “woke” policies. Left-rated sources, meanwhile, downplayed or ignored those accusations, while some drew connections between the collapse and deregulatory efforts under the Trump Administration.
Various sides of the media presented biased conclusions on what caused SVB's failure. When that happens, misinformation can spread.
What Happened to Silicon Valley Bank?
Before exploring speculation on factors that potentially contributed to the collapse, here is a run down on what is known about the collapse of Silicon Valley Bank.
Silicon Valley Bank catered primarily to technology startups, which are capital-intensive businesses. SVB also invested heavily in government bonds, which have decreased in value recently due to the Federal Reserve’s interest rate hikes.
Last week, SVB announced plans to sell additional stock to make up for losses inflicted by the bond value decrease. This sparked a "bank run," as customers worried about their money invested in the bank rushed to withdraw it. On Thursday alone, customers tried to withdraw $42 billion from SVB. On Friday, the FDIC stepped in and took control of the bank. The SEC and the DOJ are both opening investigations into the collapse.
Conservatives Blaming ‘Wokeness’ Find an Audience in Right-Rated Outlets
Many right-rated outlets highlighted ideological mission statements and diversity initiatives promoted by SVB as a possible detriment or distraction that hindered the bank from addressing economic issues stemming from rising interest rates, inflation, and the post-COVID-19 pandemic market.
Fox News (Right Bias) interviewed Home Depot co-founder Bernie Marcus, who stated the collapse was partially because the bank was “pushed” by the Biden Administration to care more “about global warming than they do about shareholder return.” Marcus added, “these banks are badly run because everybody is focused on diversity and all of the woke issues and not concentrating on the one thing they should, which is, shareholder returns.”
Marcus is potentially referring to ESG, an investing framework that incorporates “environmental, social, and governance” risk factors in investment decisions. Biden is expected to use the first veto of his presidency to protect a rule allowing the Labor Department to use ESG in its investment framework.
The New York Post (Lean Right) quoted Marcus’ interview alongside quotes from SVB executives praising the bank’s diversity and inclusion initiatives. The Post did not mention ESG investing in its article. Silicon Valley Bank does incorporate ESG goals in its corporate philosophy, but the Post’s article instead cited the bank’s “month-long Pride campaign and a new blog emphasizing mental health awareness for LGBTQ+ youth” as being the focus of executives while the bank “raced toward collapse.” Thus, it portrayed the executives as too distracted by “woke” ideology to notice warning signs, not as making ill-advised financial decisions guided by “woke” ideology.
This point was echoed in a piece in Wall Street Journal Opinion (Lean Right Bias), where a columnist wrote, “I’m not saying 12 white men would have avoided this mess, but the company may have been distracted by diversity demands.”
Liberals Dismiss ‘Woke’ Talk, Tie Collapse to Big Tech Struggles, Trump
Left-rated outlets didn’t cover or dismissed claims that “woke” ideology or ESG investing contributed to the bank collapse, instead focusing on the financial decisions of SVB that led to customer panic, often highlighting similarities between the SVB collapse and past bank runs where ESG and political ideology were not a factor.
The piece stated that the bank “boomed” during the pandemic, when many technology companies experienced heightened demand and growth. Following layoffs and “suffering” across the tech sector in recent months, many tech startups with money in SVB sought to withdraw money. SVB announced it was selling part of its bond holdings at a “steep loss of $1.8 billion.” This “spooked” investors and led to a “textbook definition of a bank run.”
The Independent’s (Lean Left Bias) coverage rejected claims that ideology contributed to the bank’s collapse. The article began with quotes from Secretary of the Treasury Janet Yellen and Rep. Alexandria Ocasio-Cortez (D-NY), then quoted Rep. James Comer (R-KY) tying the collapse to leftist ideology. Before stating Comer’s quote, the article drew a strong contrast between the words of Yellen and Cortez and those of Comer, determining that Washington’s “serious political thought,” referring to Ocasio-Cortez and Yellen, were focused on solving the crisis, while “America's culture warriors,” referring to Comer, were looking for “simplistic and convenient explanations.” The article called accusations that “woke” ideology contributed to the collapse “meaningless” and “nonsense.”
Analysis in the Daily Beast (Left Bias) tied the bank’s collapse to deregulation of banks under the Trump administration. The article quoted Rep. Dan Goldman (D-NY), who stated, “It’s pretty well-known now in 2018, under the Trump administration, regulations of banks were softened and loosened, which very well may have contributed to the highly concentrated investing that Silicon Valley Bank did with all of its deposits.”
In a New York Times Opinion (Left bias) op-ed, Sen. Elizabeth Warren (D-MA) blamed deregulation and Trump for SVB's demise, but also pointed to corrupt incentives. "Never again should large companies with billions in unsecured deposits expect, or receive, free support from the government," Warren wrote.
Separating Truth from Fiction and Speculation
Some, like The Wall Street Journal’s investing columnist and Home Depot’s co-founder, suggested that SVB’s focus on “woke” social justice initiatives could have distracted its leaders from running a proper bank, while others, like Rep. Goldman, pointed to decreased banking regulation as the cause of the collapse.
The truth may be some combination of both sides' suggestions. But it's important to distinguish financial analysis of the collapse with surrounding speculation. Presenting subjective analysis as fact is misinformation.
These distinctions are crucial when consuming information across the political spectrum. Opinion-based statements and speculations can be valuable, but you shouldn't just accept them as fact.
Isaiah Anthony is a News Curator at AllSides. He has a Center bias.
This piece was reviewed by Managing Editor Henry A. Brechter (Center bias), Daily News Editor Joseph Ratliff (Lean Left bias), and Julie Mastrine, Director of Marketing and Media Bias Ratings (Lean Right bias).