Warnings Signs Hiding in Plain Sight – A complete mess that could have been avoided
In this latest blog, we are drawing upon our almost 20 years of experience in Canadian Banks (last year 10 years in senior Treasury positions, including Bank Treasurer), both Large and Small Medium Sized banks to review the situation.
The U.S. regional banks are significant in the banking industry and represent 33% of total deposits in the U.S. As of the week ending March 1, 2023, Large Banks’ deposits have declined faster than U.S. regional banks, as customers have spent down and reallocated deposits toward interest-yielding assets such as T-bills (Table 1)
Yet with the crisis of confidence, there was fear that deposit outflows would overwhelm the U.S. regional banking space and cause further banks to fail, leading to further market disruption in credit markets.
Table 1 – Deposit Growth Small vs Large U.S. Banks (as of March 1, 2023)
We will review the Silicon Valley Bank (SVB) situation and what caused the market disruption last week.
- Overview and Business Model: SVB was the 16th-largest bank in the United States at the time of its failure on March 10, 2023. The bank’s deposits increased from $62 billion in March 2020 to $124 billion in March 2021, benefitted from the impact of the COVID-19 pandemic on science and technology (work-from-home companies).
- SVB was not able to redeploy the additional $62 billion in deposits, into new loans, and as result, chose to invest in U.S. Treasury and Mortgage-backed Securities (average duration of 4-5 years) as yields at the time in 2021 were higher on fixed-rate securities as compared to floating rate securities and designated as held-to-maturity.
- While duration or interest rate risk is taken on by banks through the securities book, the primary risks a bank takes on its balance sheet and attempts to manage would be credit risk based on the underlying and maturity mismatch between its loans and deposits and other funding sources.
- The securities book and other hedging via derivatives such as interest rate swaps are used to reduce the inherent maturity mismatch of assets and liabilities and underlying interest rate risk position. The securities book is also used to provide liquidity when deposits are withdrawn by customers, so understanding the liquidity and interest rate characteristics of the deposit base under various interest rate scenarios in a dynamic environment is critically important.
- SVB’s Business model (Venture Capital, Technology, and Fintech (including Crypto) levered to low-interest rates. The bank’s customers were primarily businesses and wealthy individuals in the technology, life science/healthcare, private equity/venture capital, and premium wine industries.
- These industries would be considered largely long-duration industries (do well when interest rates are low as valuations are high. New money to fund innovation comes into the industry without focusing on profitability given the low cost of capital). As the cost of capital has significantly increased due to higher interest rates, private funding of these businesses has reduced in 2022, and into 2023 (See Table 2).
Table 2 – Venture Capital Investment vs Cost of Capital (10-year U.S. Treasury)
The natural balance sheet position of SVB would be floating rate term loans (~3-year duration) and short-term/non-maturity deposits (< 1-year duration) of venture capital firms and other banking services for the executive/tech teams. The spread between what clients would pay for the loans less interest paid to clients on the deposit would be the reward for the maturity mismatch (between 2-3 years) as well as the credit risk of the underlying firms/individuals.
- As interest rates have risen in 2022-23, startup companies withdrew deposits from the bank to fund operations as private financing became harder to come by. To raise needed cash to fund the withdrawals, by March 8, the bank sold all of its available-for-sale securities of $29 billion at a US$1.8 billion realized loss. On March 9-10, customers withdrew $42 billion (25% of deposits in 1 day), leaving the bank with a negative cash balance of about ~$1 billion.
- SVB was a pivotal part of the tech world, which has been rocked by mass layoffs in the past year and has relationships with about 50% of America’s venture capital-backed companies, making the impact of its failure potentially far-reaching if uninsured deposits are not fully recovered. The FDIC is looking to find another bank that is willing to merge with SVB, to safeguard uninsured deposits, though a deal is not certain.
- Recent Credit Ratings Pressure: In early March, Moody’s’ threaten to downgrade SVB’s credit rating from single A, based on unrealized securities losses of $15.1B related to US Treasuries, Mortgage-backed securities (MBS), Commercial Mortgage-backed securities (CMBS). The unrealized losses in the held-to-maturity portfolio were a result of the increase in rates over the past 12 months.
- If the held-to-maturity portfolio was reclassified or assets were sold at a realized loss to free up cash to pay depositors, this would severely reduce Total Capital of $18 billion and the capital ratio would be below the regulatory minimum. This caused the bank’s management to consider raising new fresh equity to maintain the capital ratio above the regulatory minimum.
- The bank’s management — with the help of Goldman Sachs, its adviser — chose to raise new equity from the venture capital firm General Atlantic and also to sell a convertible bond to the public. It does not appear that the new equity raising, at least initially, had been made under duress. It was meant to reassure investors. But it had the opposite effect: It so surprised the market that it led the bank’s very smart client base of venture capitalists to direct their portfolio clients to withdraw their deposits en masse. This led to a run on deposits.
- It appears that the collapse could have been avoided — it happened because management bungled how it communicated to its customers and the public and created a crisis of confidence.
Interest Rate Risk & Asset Liability Mismanagement
- As money flowed into Venture Capital, Technology, and Fintech in 2021 as the money supply increased (including the COVID-19 stimulus), deposits increased 95% YoY or $60B at SVB, which was the largest change of all U.S. regional banks.
- Looking at Table 3 below, we note that SVB’s balance sheet growth was significant and there was too much excess liquidity (not enough lending demand to redeploy deposits) and that securities (potentially running a duration mismatch in a low-interest environment) rather than client lending/services were being used to boost earnings.
Table 3 – Balance Sheet Growth of Select U.S. Banks
- Not all Deposits are Created Equally: SVB’s client base and reliance on institutional/Venture Capital funding-related entities rather than diversified retail deposits may have led to the dramatic increase in 2021 and decrease in 2022/23 in deposits.
- We can see that 90% of deposits were uninsured at SVB supporting that most of the deposit base was largely institutional money which tends to be extremely flighty and exits en masse in periods of liquidity stress. The regulations address deposits from a client perspective and how a bank manages its liquidity position.
- Deposits created in a period of increasing reserves (during 2020/21) tend to be large institutional deposits (“non-core”); these deposits tend to exhibit higher run-off rates and greater re-pricing sensitivity to rate changes than traditional retail deposits and hence have a shorter duration. There are significant differences in modeled duration for different deposit cohorts; traditional retail deposit durations range from 3 to 7 years while “non-core” deposit durations are about 2 years. It appeared that SVB considered the new deposits, to be “core deposits” which were sticky and that may be redeployed into long-term assets rather than held in short-duration/liquid assets.
- Loan growth has historically been slow in the first couple of years of an economic recovery. Slow loan growth in 2021 supported demand for securities given the lack of investment opportunities and the amount of excess liquidity due to high client deposits. Given the lack of lending demand, SVB could not redeploy the excess liquidity gathered through deposits in 2021 and redeployed via the investment portfolio.
- Buying Bonds in 2021 at Generational Low Fixed Interest Rates to Maximize Current Period Income: This increase in deposits of $60B was invested in long duration held-to-maturity (HTM) portfolio in fixed-rate/fixed term as at the time fixed rate asset yields were greater than floating rate assets at the time, without considering if inflation or interest rates would rise as quickly as they did in 2022. Going back throughout history, it does not appear that SVB has not taken on significant duration risk at this magnitude and appeared to be a shift in Risk Profile/overall Balance Sheet strategy.
- The investment portfolio (AFS & HTM) represented ~60% of total assets in 2022 (vs. 32% in 2020) which appears to be an outlier relative to other U.S. regional banks (which had roughly 30% of assets in their investment portfolio). The significant shift in the economic environment from 2019 to 2023 and the focus on the underlying client base driving support through the COVID-19 pandemic partially drove this change. It appeared that SVB did not alter its strategy in response to the change in conditions (i.e. inflation was no longer transitory in early 2022).
- Held-to-Maturity as % of Investment Portfolio was 80% which was held at amortized cost (unrealized gains/losses are not recognized in the P&L or Capital Ratio) rather than marked-to-market and recognized in either P&L (Held-for-Trading) or Accumulated Other Comprehensive Income (AOCI) which would have impacted the Capital Ratio quarterly. The size of the HTM portfolio appears to be an outlier relative to the industry as well and may be considered to be an aggressive accounting treatment as the unrealized loss on the mortgage bond portfolio was not recognized until the securities were sold. Something we do not know is the assumptions the company did make around how much of the deposit base was core vs non-core and the assumed maturity portfolio around these deposits. It appears they considered that a large portion of deposits raised, were “core deposits” based on their actions. This accounting treatment likely concerned Moody’s as the unrealized losses were enough to wipe out the equity holders once bonds were sold if deposits were to be withdrawn.
- Assumptions Around Non-Maturity Deposits likely played into HTM portfolio Duration: Given that there was a surge of deposits in 2021, the underlying business of its client base (i.e. cash burn rate of tech/venture capital), 90% of deposits were uninsured, and the company have stated that deposit beta was 70% (Measures deposit rate changes relative to market rate changes, so with 100 bps change in Fed Funds Rate, 70 bps change in SVB funding costs to maintain deposit balances), it’s likely that core deposit assumptions would be likely less than 50% of the deposit base. Our proforma calculation on deposits for the Liquidity Coverage ratio supports this assumption as well. The Non-core deposits should have been invested in short-duration High-Quality Liquid Assets (i.e. deposits at Fed or less than 3-month T-bills), that would be readily convertible to cash should deposits be withdrawn. We will never know as these assumptions are determined by management and reviewed by the bank’s Asset Liability Committee and potentially by the Risk Committee of the Board of Directors.
- Through this one change, the balance sheet was transformed from a client-driven balance sheet lending/deposit-taking (largely floating rate exposure, with a maturity mismatch of about 2-3 years between loans/deposits and underlying credit risk of venture capital and private equity) into a large levered mortgage fund in which the market value of the bank’s equity was very sensitive to increased mortgage/interest rates. The held-to-maturity classification would have masked this situation.
- As liquidity was ample, the loan book increased by $18 billion (2021 vs 2020) so that all the deposit funds of $60 billion could not be redeployed into loans. By transforming the balance sheet into a levered mortgage bond fund, these actions maximized current period income, without considering mark-to-market on the balance sheet if rates increased in the future.
- A test of the impact on the Economic Value of Equity would have revealed the error in judgment. However, as SVB was below the $250 billion threshold which did not require enhanced prudential standards, such as stress testing, the shift in risk appetite did not appear to be stressed across various interest rate shocks. Banks that are required to run stress tests, will typically run interest rate shocks on both:
- 1) Earnings at Risk (EAR) (Current period income perspective)
- 2) Economic Value of Equity (EVE) at Risk (Balance Sheet perspective)
Bank’s trade-off between the short-term (current income) vs long-term (economic value of equity) when determining the interest rate risk balance sheet position. Typically Banks would run stress tests on interest rates monthly under the following six scenarios:
- parallel shock up of yield curve;
- parallel shock down;
- steepener shock (short rates down and long rates up);
- flattener shock (short rates up and long rates down);
- short rates shock up; and
- short rates shock down.
When a review of an institution’s Interest Rate Risk exposure reveals inadequate management or excessive risk relative to capital, earnings, or general risk profile, the regulator will require mitigation actions and/or additional capital.
In Canada, an outlier/materiality test compares an institution’s maximum change in EVE (economic value of equity), under the six prescribed interest rate shock scenarios above, with 15% of its Tier 1 capital.
A parallel shock of 200 bps is a typical scenario that is run by a bank and would have revealed the inherent risk with investing deposits in long-term bonds in 2021, as a change in EVE would far exceed 15% of the SVB’s capital (Table 4) and would have represented almost 60% of the capital levels.
Table 4 – Proforma 200 bps Interest Rate Shock on Investment Portfolio and Total Capital 2021
Running this analysis at the time would have told management to either raise more equity or increase floating rate securities rather than fixed-term securities (i.e. do not maximize current period income at the risk of potential risk in the economic value of equity in the long-term should rates rise).
While this may not have been ideal in the short-term when looking at current period income, the trade-off would be that the bank would have been sustainable in the long term should interest rates increase dramatically during the period the securities were held to maturity.
We note in Table 5, SVB’s floating rate equity exposure was negative and fixed rate exposure was positive, so as the interest rate rose, the bank’s economic value of equity was at risk, as deposits may reprice faster than loans (to keep deposits on the balance sheet continuing to fund the loans) as deposit beta estimated by management was 70% and fixed-rate securities would lose value.
The unrealized loss of $15.1 billion represented a 16% decline in the value of long-term bonds. Many individual investors would have seen similar losses in their bond portfolios with a duration of 6-7 years in 2022 given the velocity of rate hikes by the Federal Reserve.
However, the real issue here is that banks are levered vehicles (asset-to-equity multiplier of 13x), so losses of 16% are magnified significantly from an Economic Value of Equity perspective, potentially wiping out 80% of Total Risk-based Capital, once the securities are sold (losses are then realized) to meet deposit withdrawals that SVB was facing in March 2023.
The loss of 25% of deposits on March 10 is much higher than regulatory liquidity stress tests on these deposits (between 5-30% runoff in a hypothetical 30-day stress period) and would have triggered and recognized a large portion of the $15.1 billion loss. The deposit book was largely uninsured (~90% of total deposits), so there was an incentive for customers to withdraw as if the bank failed, these depositors would only be covered up to $250,000 per account.
We estimate the proforma total capital ratio would have been ~6%, requiring an infusion of new equity, to come back above regulatory capital requirements.
SVB may have extended its lifeline further, if it went to the Fed discount window, and raised liquidity to meet deposit withdrawals to a point rather than selling down the held-to-maturity securities portfolio which crystallized the unrealized losses requiring new equity. However, it’s difficult to determine from the outside looking how much of SVBs assets were already encumbered by 3rd parties versus Federal Reserve which would have determined the available liquidity.
There is a stigma associated with going to the discount window which is probably why SVB did not pursue this course of action, though Federal Reserve may have been able to adequately handle the situation, without the disruption that was caused.
Table 5 – SVB’s Interest Rate Risk and Balance Sheet Position (Dec 31, 2022)
A few other issues related to Interest Rate Risk:
- Concentration risk on long-duration: Both business models/clients (Venture Capital) are levered to low-interest rates. This was exacerbated by SVB’s balance sheet position which was also transformed into a long-duration mortgage bond portfolio in 2021. Most banks fail due to credit risk. The risk that caused SVB to fail was a duration mismatch between High-Quality Liquid Assets (Treasuries and MBS) and deposit liabilities that were not dynamically managed. The deposit surge that occurred during 2021, from hot money Venture Capital firms and other corporate deposits, at the time of generationally low-interest rates, may have been the undoing of SVB.
- Interest Rate Risk mitigation via hedging: Lack of hedging (pay fixed-receive float interest rate swaps) of securities at SVB, despite increasing Fed Funds rate over the last 12 months. The Held-to-Maturity book was too large relative to the balance sheet size at 45% of assets and was an aggressive accounting treatment, given the potential characteristics of the deposits.
- The extra yield of MBS, CMBS, and CMO relative to US Treasuries when the securities were purchased in 2021, was a result of convexity, and these securities are difficult to hedge with interest rate swaps, due to underlying convexity in MBS/CMBS/CMO. Management could have also purchased floating rate securities and altered underlying characteristics with a receive-fix/pay-float interest rate swap.
- No repositioning of balance sheet or hedging position as interest rates were increased in early 2022: In 2021 Balance Sheet position was similar to 2022 with 60% fixed rate assets (net of swaps) vs. 90% floating rate funding. As rates increased in 2022, asset values fell (bond portfolios), while deposits repriced higher as well (deposit beta was 70% (sensitivity of balances to increase in interest rates)). It does not appear that Treasury or Risk Management attempted to mitigate the risk of higher interest rates on the Bank’s Economic Value of Equity. The Treasury team could have sold off the HTM portfolio taken a much smaller loss in early 2022 when it started to become evident that “inflation was not transitory”, and repositioned the portfolio duration to be much shorter in the book as interest rates increased. This may have also been done synthetically through economic hedging using interest rate swaps (receive float/pay fixed) as well. The Treasury group is responsible for managing the balance sheet position across the business cycle and is not a “set it and forget it” strategy and ALCO is responsible for management oversight of this process.
- Regulatory Threshold: CEO Greg Becker, lobbied for reduced regulatory constraints on banks below $250 billion in assets. In 2015, he submitted a statement to a Senate panel pushing legislators to exempt more banks – including his own – from new regulations passed in the wake of the 2008 financial crisis. Despite warnings from some senators, Becker’s lobbying effort was ultimately successful.
- He mentioned at the time: “Without such changes, SVB likely will need to divert significant resources from providing financing to job-creating companies in the innovation economy to complying with enhanced prudential standards and other requirements.” This is a common view in financial services, that risk and compliance requirements would tie up significant resources that are not value-added. This is a reoccurring theme that shows up time and time again when reviewing what went wrong when businesses fail.
- Liquidity and Funding: As the bank’s assets were below $250 billion, it was not subject to the Liquidity Coverage Ratio or Net Stable Funding ratio.
- The Liquidity Coverage Ratio (LCR) may have highlighted the reduced liquidity of investing in MBS, CMO, and CMBS relative to Treasuries. LCR = High-quality liquid assets (HQLA)/ Total Net Cash flow amount under a 30-day liquidity stress period. The Level 2 cap of 40% of total HQLA would have highlighted the issue of too much MBS, CMBS, and CMO versus US Treasuries/Cash as well.
- With limited information, we have attempted to roughly calculate the LCR in Table 6, which highlights the risks that SVB was taking from a liquidity perspective as the proforma LCR of 59% would be below the regulatory minimum. SVB was not subject to LCR or NSFR. Though it is a rough calculation (with limited information) almost 50% of deposits were to be held in HQLA and the liquidity buffer would have been able to withstand the 25% runoff on March 9-10. The calculation also highlights another important theme that as a result of the $250 billion threshold and regulatory arbitrage, banks that did not have to comply with LCR or NSFR could offer higher interest rates to customers for their “low-quality deposit” from financial intermediation (venture capital) from a G-SIB perspective (see below for further information). G-SIBs would have re-priced these deposits in the past, offering little/no interest given the fact that it would constrain the bank’s balance sheet from a liquidity perspective. This is why having G-SIBs acquire regional U.S. banks is probably not a likely outcome, and the government will attempt to backstop liquidity, to ensure deposit outflows are met, given that not all of the risk was transformed under Basel III regulation and merely shifted to other parts of the economy. Risk is required to increase innovation and improve productivity, which is why regulators try to balance regulation for the size, scope and complexity of the underlying business models.
- Net Stable Funding Ratio would have highlighted the Asset Liability mismatch between the investment portfolio and deposits. Assets were 60% fixed-rate, fixed term, funding with largely floating rate/non-maturity deposits, which is double the industry average of investment portfolio as % of total assets.
Table 6 – Proforma Liquidity Coverage Ratio – December 2022
- Stress Testing: Category IV organizations like SVB are subject to supervisory stress tests conducted by the Federal Reserve every other year. Category IV institutions are “not required to conduct and publicly report the results of a company-run stress test” and “reduces the required minimum frequency of liquidity stress tests and granularity of certain liquidity risk-management requirements”. In 2021, SVB passed the threshold of $100 billion under management, triggering some additional scrutiny as a Category IV bank but remaining exempt from the more frequent and detailed analyses that regulators perform to determine whether banks above $250 billion of assets have sufficient capital to withstand a crisis.
- Resolution Planning: SVB submitted a resolution plan on a three-year cycle beginning in 2022. The Bank submitted its resolution plan to the FDIC in December 2022.
- Management Changes: SVB without a Chief Risk Officer (CRO) for much of 2022: New CRO started 10 weeks ago in early 2023. Having a 2nd line of defense may have brought the Interest Rate and Liquidity Risk to the forefront and the bank may have attempted to hedge rates in early to mid-2022 when inflation was no longer “transitory” and rates climbed. Laura Izurieta stepped down from her role as CRO of SVB Financial Group in April 2022, and formally departed the company in October, according to an SVB proxy filing. The bank appointed her permanent successor as CRO, Kim Olson, in January of this year. It is unclear how the bank managed risks in the interim period between the departure of one CRO and the appointment of another.
- Moral Hazard/Risk-taking Behavior: Realizing the writing was on the wall, many executives sold significant stock holding in the month before announcing capital raise in early March. We hope that regulators review this transactions in light of the failure of the bank and potentially create more accountability for actions.
- Regulation Arbitrage and Marketability of SVB to G-SIB Banks: Since adopting Basel III rules, G-SIBs have repriced low-quality deposits (i.e. institutional fast money deposits) and many of these deposits may have found their way into the unregulated space U.S. regional banking space such as SVB. Given the potential for impact on G-SIBs’ Liquidity and Funding ratios, it may be a difficult decision for G-SIBs to acquire the deposit base given the regulatory overhang. However, though we are not experts at bankruptcy law though looking at historical precedence, with the resolution of the bank and selling of separate businesses and assets, equity holders will likely be wiped out (given existing unrealized loss on investment portfolio) and deposit holders should recover most of their money given depositor preference under bankruptcy law. Given that SVB is a large regional player, it may be difficult for other regional players to obtain additional equity and funding in the current environment to take over the failed bank.
- As per the FDIC: “By law, after insured depositors are paid, uninsured depositors are paid next, followed by general creditors and then stockholders. In most cases, general creditors and stockholders realize little or no recovery. Payments of uninsured funds only, called dividends, depend on the net recovered proceeds from the liquidation of the bank’s assets and the payment of bank liabilities according to federal statute. While fully insured deposits are paid promptly after the failure of the bank, the disbursements of uninsured funds may take place over several years based on the timing of the liquidation of the failed bank assets. “Based on our calculations it is likely that uninsured depositors, such likely recover close to ~90% of their deposits subject to the sale of businesses and loan book. Late Sunday afternoon, the government announced a new liquidity facility and guaranteed the uninsured deposits of both SVB and Signature Bank. This will likely reduce the potential flight to safety behavior of customers next week in these regional US Banks that could have moved their deposits to the G-SIBs causing further bank failures.
Unfortunately, many of the risk safeguards for entities above $250 billion such as liquidity and interest rate risk stress tests would have helped SVB sidestep this situation and continue to be a going concern.
Most of the regulations have been developed drawing on the previous crisis in the past so that they do not repeat in the future like the Great Financial Crisis (Liquidity Risk) and Savings and Loan crisis (Interest Rate Risk). Circumventing regulations may have increased profitability in the short term by taking excessive duration and liquidity risk, though in the long term, these risks were fatal for SVB.
Other Industry Players:
Some other financial institutions have been feeling tremors from SVB’s fall, and Signature Bank, prominent in the crypto world, saw its shares drop over 23% on Friday while shares of First Republic, a regional bank, fell by 15%, PacWest Bancorp down 37%. Below we have done a deep dive into their balance sheets to determine if there are similar risks (market and liquidity risk) hiding in plain sight.
Based on our review of select players, it appears that SVB was in a class of its own:
- The large duration mismatch between investment portfolio and deposits, and potential for the capital shortfall in the case of rising rates, deposit outflows, and forced asset sales. If they had to sell off the Held-to-Maturity portfolio, this would have required a capital raise to remain above the regulatory total capital ratio of 10.5%.
- Large Held-to-Maturity portfolio (45% of total Assets) and aggressive accounting treatment of held-to-maturity.
- The highest surge of deposits in 2021 relative to other banks and a large institutional base of depositors as evidenced by 90% uninsured deposits
- Concentration risk as SVB was the bankers to technology, start-ups, and venture capital firms, and as a result too reliant on one segment of the economy. A high level of deposits from one sector that showed a rising probability of default and laying off employees should have been a sign to increase liquidity and capital, which it did not.
Crypto-friendly Signature Bank was shut down by regulators Sunday, after the collapses of Silicon Valley Bank, Silvergate given the large uninsured deposits and large exposure to digital asset deposits (~20% of total deposits) that would likely flee en masse creating a further crisis of confidence.
On Sunday evening March 12, the U.S. Federal Reserve announced the Bank Term Funding Program (BTFP) which gives banks the ability to exchange their HQLA bonds at par (i.e. no negative mark-to-market) so that they can obtain liquidity and deal with potential deposit outflows.
This new facility solves the problem of forced selling of assets and negatively impacting the capital ratio by opening up this new facility to other Financial Institutions dealing with negative mark-to-market on their securities portfolios.
If SVB had a conversation with U.S. Regulators before reaching out to Goldman Sachs to raise equity, may have avoided the whole situation and liquidity may have been obtained via the Fed discount window. These actions should return confidence to U.S. Banking System. We believe systemic risk in U.S. Banking is low as a result of actions announced.
See Table 7 below for a comparison of Select U.S. Regional Banks
Table 7 – Comparing Select U.S. Regional Banks – December 31, 2022
One thought on “A Note on Silicon Valley Bank (SVB) and potential risks in other US Regional Banks – Asset Liability Mismanagement, Management, Regulation, and Governance ”
A great read, and explanation as to went wrong. I also liked your comment about risk management and compliance oversight being viewed as non-value add when the winds are favourable…….