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Lets not blame remote work as the reason SVB "[locked] up half of its assets in a $91bn portfolio of securities that made it vulnerable to rising interest rates

by _ajoj 4y ago

Lets not blame remote work as the reason SVB "[locked] up half of its assets in a $91bn portfolio of securities that made it vulnerable to rising interest rates" and not having a hedge. This failure had nothing to do with remote work and everything to do with executives gambling. > In a story in the Financial Times out Thursday, current and former Silicon Valley Bank employees cited the bank's commitment to remote work as one reason for its failure. A bit weird for axios not to link the article in that first sentence but I believe this is it: https://archive.is/0L9UE https://archive.is/0L9UE From that article: > the bank acknowledged in its annual report that it “may experience negative effects of a prolonged work-from-home arrangement”. Then it cites this "expert": > “It is harder to have a challenging call over Zoom. It makes it harder to challenge management,” said Nicholas Bloom, a professor at Stanford University who has studied remote working extensively. “Ideas like hedging interest rate risk often come up over lunch or in small meetings.” Anything that can come up over lunch or in small meetings can be also brought up in the variety of remote work tools including: zoom/teams/mattermost/slack/email. The real headline here is SVB culture: > entertaining entrepreneurs and venture capitalists at ski trips, baseball games and private boxes at concerts. > lent billions of dollars to wineries and vineyards where it could network with clients and send wine to its customers’ parties. > “I almost felt like I was at work on a college campus" > internal conflicts as a result of its rapid expansion > spending nearly $1bn to acquire Boston Private, the unit suffered a rush of departures shortly after the deal closed And Boston Private culture? > post-merger environment as “toxic” before storming off to cross-town rivals, according to deposition testimony and internal emails made public in the company’s lawsuit against four former employees. In the span of 12 months, its assets under management fell from $9.3 billion to $7.1 billion, and the unit went from profit-maker to money-loser See https://www.bizjournals.com/boston/news/2016/07/14/the-inside-story-behindboston-privates-public.html https://www.bizjournals.com/boston/news/2016/07/14/the-insid... So again nothing to do with remote work.

neilwilson 4y ago
Here’s a thought experiment for you. Would this “gambling” bank be insolvent this week now the Bank Term Funding Program is in place? You may be surprised by the answer.
superyesh 4y ago
The points you highlight are very valid, but you cannot just say it had nothing to do with remote work. >Long after Wall Street ordered its bankers back to the office, the California-based lender’s chief executive, Greg Becker, at times worked from Hawaii, president Mike Descheneaux decamped to Florida, chief risk officer Laura Izurieta was based in a suburb of Washington and general counsel Mike Zuckert worked mostly from New York, according to several people close to the bank. I have noticed quite often that a lot of things to fall through the cracks irrespective of how many meetings you have on zoom. A lot of catch up happens offline in informal conversations. This might be mitigated on an IC level mostly given that a good team might have a well groomed backlog being fed to them. But at a leadership/design level things are still more informal and might take a few years to get to an efficient level. So dismissing that remote work could have led to a gap is probably being very narrow. The way I read this was the leadership did not handle remote work well and feedback did not flow bidirectionally well across multiple levels. When in person sometimes luck/chance just happens and might be enough to mitigate huge issues. edit: from the downvotes looks like remote work is an untouchable topic and has nothing wrong with it. /s
- fsociety 4y ago
  If my bank requires luck to practice risk management then I am keeping gold bars under my bed.
  - superyesh 4y ago
    I just meant any organization can/has an informal structure and has to mature into a remote work structure which is relatively new.
- signa11 4y ago
``` The way I read this was the leadership did not handle remote work well and feedback did not flow bidirectionally well across multiple levels. When in person sometimes luck/chance just happens and might be enough to mitigate huge issues. ``` got it, leadership relies on luck/chance to mitigate huge issues ... (O_O)

by _ajoj 4y ago

neilwilson 4y ago

Here’s a thought experiment for you. Would this “gambling” bank be insolvent this week now the Bank Term Funding Program is in place? You may be surprised by the answer.

superyesh 4y ago

The points you highlight are very valid, but you cannot just say it had nothing to do with remote work. >Long after Wall Street ordered its bankers back to the office, the California-based lender’s chief executive, Greg Becker, at times worked from Hawaii, president Mike Descheneaux decamped to Florida, chief risk officer Laura Izurieta was based in a suburb of Washington and general counsel Mike Zuckert worked mostly from New York, according to several people close to the bank. I have noticed quite often that a lot of things to fall through the cracks irrespective of how many meetings you have on zoom. A lot of catch up happens offline in informal conversations. This might be mitigated on an IC level mostly given that a good team might have a well groomed backlog being fed to them. But at a leadership/design level things are still more informal and might take a few years to get to an efficient level. So dismissing that remote work could have led to a gap is probably being very narrow. The way I read this was the leadership did not handle remote work well and feedback did not flow bidirectionally well across multiple levels. When in person sometimes luck/chance just happens and might be enough to mitigate huge issues. edit: from the downvotes looks like remote work is an untouchable topic and has nothing wrong with it. /s

fsociety 4y ago
If my bank requires luck to practice risk management then I am keeping gold bars under my bed.
- superyesh 4y ago
  I just meant any organization can/has an informal structure and has to mature into a remote work structure which is relatively new.
signa11 4y ago
``` The way I read this was the leadership did not handle remote work well and feedback did not flow bidirectionally well across multiple levels. When in person sometimes luck/chance just happens and might be enough to mitigate huge issues. ``` got it, leadership relies on luck/chance to mitigate huge issues ... (O_O)