Governance and risk mitigation, what's evolving?
A "surprising" surprise for #stakeholders, including myself, Silicon Valley Bank experienced the largest and fastest bank run in US history, prompting discussions on future implications and the Board's role. This week, I was fortunate to participate in a panel discussion with Mutual Fund Directors Forum Senior Counsel, Dianne M. Descoteaux and Dechert FSG leaders, Megan Johnson and Corey Rose.
Nor limiting, a few key takeaways:
1. While no depositors lost money in this instance, #futurescenarios may not guarantee the same outcome.
2. Many regional banks are under #stress due to their real estate portfolios.
3. Experts anticipate more bank failures before stability is restored.
4. The impact on registered funds was minor, although some fund shareholders faced temporary uncertainty due to their accounts with SVB.
5. Funds' cash is insured only up to $250,000; amounts above this are at risk in case of custodian failure.
6. Proposed changes under Basel III are expected to have significant implications.
To safeguard against such #risks, funds can take #proactive measures.
Many thanks to Dianne, Megan, and Corey for initiating the discussion on how SVB influenced the course of history and for providing a thoughtful post-mortem. Their insights included valuable risk management strategies designed to enhance stakeholder #valuecreation.