Former Assistant Treasury Secretary on ESG, social justice initiatives causing bank failures: ‘100% true’

Silicon Valley Bank, Santa Clara, Calif., March 10, 2023

Monica Crowley discusses bank failures over the weekend, ESG and social justice being the cause, and how risk assessment measures put into place after the 2008 financial crisis were ignored. The former Assistant Secretary of the Treasury dispels the rumors that Trump’s banking reforms are the cause of the bank failures, commenting “on the deregulation part, that is not part of this equation whatsoever from the Trump years. If that were the case, you'd see more far more widespread problems in the banking sector. And again, we hope this doesn't spread but did the Trump deregulation aspects on the financial sector came into play? Not at all.” She says that, “in this situation the DEI and ESG are part of this. It is 100% true that we are seeing industries, companies across the board that changed their focus to a social justice platform more than their actual core business, there are deleterious effects on that core business. Is that reverberate all the way down to the customer, but certainly through the board, shareholders, etc, all the way down, because they're not focused on their core mission.” Commenting, “What we do know about this Silicon Valley Bank is that the risk assessment person was focused on again, DEI stuff, she had just done a full month on LGBTQ pride, focused on underrepresented entrepreneurs. So again, one of the things that contributed to the first financial crisis back in 2008, were all these affected banks were handing out loans like candy to people who could not service those loans, they couldn't afford mortgage backed securities, all of this stuff, because they were engaged in this kind of social justice approaches to their business, rather than focusing on the bottom line serving their customers and taking care of their shareholders. And so when you go off on that tangent, bad things are going to happen.” Crowley comments that her “particularly outraged” in this situation,  is that “even though the administration is saying no bailout, it is going to be a bailout, and you know who in the end is going to cover the costs for this, you and me, the average American who is very careful and responsible for with our money. We're going to be the ones that are going to cover the costs for bailing out venture capitalists, and tech people for the most part.”

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