March 17, 2023 | 21:17
Mary Daly was responsible for ensuring that Silicon Valley Bank remained stable.
Vigilance has replaced competence and profit across the banking industry, and San Francisco Fed chief Mary Daly is the poster child for this pernicious trend.
Daly, a protégé of Treasury Secretary Janet Yellen and a short-list candidate for Federal Reserve vice chairman, was supposed to oversee Silicon Valley Bank but was apparently too busy playing politics and pushing vigilante agendas to regulate rogue states like SVB, the second-largest bank. registered error.
Daly had other priorities, including climate change, George Floyd and Black Lives Matter, black-white inequality, LGBTQ+ rights, and a host of other woke social justice issues that had nothing to do with banking and finance.
Daly’s Fed bio gushes that she is committed to “understanding the economic and financial risks of climate change and inequality.” Look forward to the more existential threat of banks in her jurisdiction bundling mortgage bonds with longer maturities that exposed investors to greater interest rate risk.
In a recent LinkedIn post, Daly appeared on the sidelines of racial justice, writing, “What black voices have I lifted up? Equity and inclusion begin with me. #GeorgeFloyd.” She also posted selfies with local Black Lives Matter activists.
Meanwhile, Daly missed all the warning signs of runaway inflation, leading to the steep interest rate hikes that rendered SVB’s investments worthless.
In 2021, she said: “I don’t think we have unwanted inflation around the corner. I don’t think it’s a risk.”
Early last year, Daly also denied that the economy was suffering from painful inflation: “That’s not what I’m seeing.” Nor did she see the need to raise interest rates.
So in August she said inflation didn’t affect her personally, so what’s the big deal? “I don’t feel the pain of inflation anymore,” Daly told Reuters.
“I’m not immune to rising gas prices, rising food prices,” she added. “But I’m not in a space where I have to make trade-offs because I have enough and many, many Americans have enough.”
Easy for her to say: She pulls down more than $422,000 a year.
From her policy papers, speeches and interviews, it’s clear that Daly believes the Fed’s core mission is not to control inflation, but to achieve full employment — and raising interest rates just hurts that goal. Her agenda is more jobs and higher wages for minorities, so sound money is not a priority for her – even though inflation is a huge tax on the working class and minorities in particular.
Until recently, Daly was opposed to the Fed’s hawkish move to tighten credit to fight inflation. Her bank examiners no doubt shared her dovish thinking and did not expect rates to rise, which may also explain why no alarms were raised at SVB.
Daly has no background in banking or risk management. After dropping out of high school, she worked at a donut shop before eventually getting her GED and attending college, where she fell in love with a socialist professor.
She said she was inspired by Marxist economist Gene Wagner, who “has guided me my whole life.”
Several years later, after earning a Ph.D. from Syracuse University, Daly landed a job as a labor inequality researcher at the San Francisco Fed, where she aligned herself with then-SF Fed President Janet Yellen, who helped her fail up.
Daly called Yellen an “important mentor in my life . . . (S)he made my career explode.” Daly quickly rose through the ranks, and in 2018 she was named president and CEO of the SF Fed — but more importantly to wokesters, she was the “first openly gay” regional Fed bank chief.
Follow The Post’s coverage of Silicon Valley Bank’s collapse
Another Daly cheerleader was Greg Becker, the CEO who presided over collapsed SVB. Until his dismissal on Friday, he appropriately also sat on SF Fed’s board of directors. It was a big, happy, awake family.
SVB’s board is packed with Trump-hating Hillary, Biden and Obama donors obsessed with “equality and diversity.” One director, Elizabeth “Busy” Burr, argued for hiring underrepresented “people of color” in the banking industry to counter “four years of a president who unleashed a wave of racism and white supremacy.”
“It’s not enough to just report the numbers,” she said. “Instead, we need to require a deep look at the corporate culture.”
While they were busy looking at corporate culture, the equally watchful SF Fed failed to notice that SVB was making risky bets on long-term mortgage bonds, even as Federal Reserve Chairman Jerome Powell telegraphed his intention to raise interest rates by 75 basis points. increases.
Is Daly to blame for not seeing the warning signs? Of course not. Daly has made President Biden’s short list to fill the open vice chairman seat of the Federal Reserve Board.
As usual, Biden blames his predecessor Donald Trump for SVB’s collapse. But he should look no further than Daly, the social activist posing as a banking regulator. Who regulate the regulators?
Paul Sperry is the former Washington bureau chief for Investor’s Business Daily and author of “The Great American Bank Robbery.”
Silicon Valley Bank