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What the hell is a “woke bank”?

As Silicon Valley Bank collapses, the right returns to its favorite boogeyman.

Two men in front of a Silicon Valley Bank branch.
People wait outside the Silicon Valley Bank headquarters in Santa Clara, California, to withdraw funds after the federal government intervened upon the bank’s collapse, on March 13, 2023.
Nikolas Liepins/Anadolu Agency via Getty Images
Whizy Kim is a reporter covering how the world's wealthiest people wield influence, including the policies and cultural norms they help forge. Before joining Vox, she was a senior writer at Refinery29.

Some banks are huge. Some are tiny. Some serve all possible kinds of customers, while others, like the recently kaput Silicon Valley Bank, carve out a niche, catering to venture capitalists and tech-related startups. But there’s another important category in the taxonomy of banks, according to a new right-wing narrative: the “woke bank.”

As SVB shuttered last week and federal lawmakers began picking through the wreckage of the first major bank failure in more than a decade, some have decided the problem was ideological. Across Twitter and television, conservatives are characterizing what was a classic bank run — albeit the largest since 2008 — as a morality play.

Citing how SVB had employee resource groups (ERGs) to help various identity groups at the company with career development, Donald Trump Jr. tweeted that the bank’s collapse was “what happens when you push a leftist/woke ideology” that “take[s] precedent over common sense business practices.” Sen. Josh Hawley (R-MO) tweeted, “So these SVB guys spend all their time funding woke garbage (‘climate change solutions’) rather than actual banking and now want a handout from taxpayers to save them.” (The US Treasury is “bailing out” depositors using money from a bank fund, not from taxpayer money.) On Fox News, Rep. James Comer (R-KY) claimed SVB was “one of the most woke banks in their quest for ESG-type policy.” Republican Florida governor and (and likely presidential hopeful) Ron DeSantis also appeared on Fox, saying that the bank had been “so concerned with DEI and politics” while in a tweet, Stephen Miller, former member of the Trump administration, questioned “how many hours & dollars were spent on equity/DEI/ESG/climate scams.”

Today, the word “woke” can be stretched and contorted to apply to virtually any issue that the right wing opposes, such as its fury over “woke capitalism” — in which corporations offer to pay travel expenses for abortions after the overturn of Roe v. Wade, or acknowledge climate change as a problem, or, perhaps most commonly, include any diversity and inclusion initiatives as part of their corporate policy. The word originates from Black political history, and it became more widely known during the burgeoning Black Lives Matter movement in 2014. As my colleague Aja Romano has explained, it has ties “to an awareness of systematized white violence against Black people,” but in recent years it’s been co-opted by the right as its favorite boogeyman.

So what on earth makes a bank woke?

Andy Kessler, opinion columnist at the Wall Street Journal, musing in a recent piece on the reasons SVB might have failed, highlighted that the bank’s board was 45 percent women and also had one Black member, one “LGBTQ+” member, and two veterans. “I’m not saying 12 white men would have avoided this mess,” Kessler wrote, “but the company may have been distracted by diversity demands.” Vox reached out to Kessler for further clarification; we had not received a response by publication time.

“It’s just the dumbest thing I’ve ever heard,” said Aditi Shekar, co-founder of a fintech startup called Zeta.

Zeta had banked with SVB in the past and had been considering banking with them again before the collapse happened. (Disclosure: Vox Media, which owns Vox, also banked with SVB before its closure.) The payroll provider Zeta uses, Rippling, was facing delays due to SVB’s failure; for a few days last week, Shekar wasn’t sure if her company would be able to make payroll. One of the things that had initially drawn her to SVB was that it tried to invest in funds led by women and members of the LGBTQ community. “But do I think tech or finance is getting too woke? No. I don’t think it’s woken up,” she said.

It’s unlikely that the SVB board was “distracted” by diversity and inclusion when, by Kessler’s own admission, the board was still mostly male and mostly white, indicating no real departure from the status quo in board rooms across the financial sector. According to data from McKinsey, as of 2021, 64 percent of C-suite executives in the financial services industry remain white men. While SVB had an ESG commitment focused on climate and sustainability, it worked with a lot of clients within tech — the digital media player manufacturer Roku, the gaming platform Roblox, the online marketplace Etsy, pharmaceutical companies — that have no discernible obsession with social justice values. Perhaps there’s a tiny subset of the financial sector that could be called “woke,” but such anti-capitalist investors and lenders describe being shunted to the margins by the traditional banking system; they’re not claiming to represent half of all the nation’s VC-backed startups, as SVB did.

“If anything, the problem at the failed banks was a lack of diversity, especially a lack of diversity in their balance sheets,” Zach Teutsch, founder of a financial advisory firm for progressives called Values Added Financial, told Vox over email.

“It’s hard for me to see how SVB’s politics had anything much to do with interest rates changing and their balance sheet being vulnerable,” Teutsch added. “This sounds like ideology in search of a fact pattern.”

It’s a pattern that conservatives seem to find in plenty of unlikely places these days. In recent years, “wokeness” has become a right-wing weapon that can shape-shift to describe countless inventions of the culture war. It has been applied not only to explicitly antiracist policies and theories, but also to the mere acknowledgment that nonwhite people exist and sometimes even participate in society. (See: the conservative furor over Netflix casting people of color for its productions, or the belief that a Disney film doing poorly is proof of a “go woke, go broke” adage.) It has even been deployed as the cause of California’s wildfire crisis.

The real reason for the SVB collapse, as my colleagues already have explained, was that the bank showed signs of not being financially sturdy amid higher interest rates and a downturn in the tech industry, in which its money was highly concentrated. Last week, investors got scared and started pulling their money out; as deposits drained, the bank could no longer stay afloat. There were a few days of deep uncertainty about what would happen to everyone who banked with SVB, until the federal government announced on Sunday that it would help ensure all depositors got their money back. But these facts haven’t stopped the conspiracy theory that SVB proves supporting ventures that help the climate crisis or advance diversity is a recipe for financial disaster.

The mechanics of a bank run aren’t some great mystery: If everyone starts demanding their money back from a bank at the same time, it will run out of cash and collapse. And investors started taking out money not because they thought the bank was too “woke,” but because they were disturbed after some recent financial moves announced by SVB. As Bloomberg columnist Matt Levine explained on Friday, while in hindsight we know that SVB’s financial situation wasn’t great, “it’s largely self-fulfilling; if all the VCs hadn’t decided all at once to pull their money, SVB probably would not have collapsed.” And the flames were arguably fanned by famed venture capitalist and Republican megadonor Peter Thiel, whose VC fund was among the first investors to pull their money out of SVB. (Thiel, it ought to be noted, has backed an “anti-woke” bank called GloriFi. It went bankrupt a few months ago.)

It’s true that people across the political spectrum, not just conservatives, are angry about the collapse of SVB and the government’s assurance that no depositors will lose any money. For both the left and right, the bailout is being narrated as preferential treatment for an elite class that should have to face the consequences of their mistakes. “I haven’t seen a single one of these guys crying for a bailout take a single ounce of accountability for their actions. It’s honestly shameless,” tweeted Rep. Alexandria Ocasio-Cortez (D-NY).

But in the past year, the right-wing push against financial institutions in particular has ramped up. Conservatives have recently taken to attacking ESG, an investment trend short for “environmental, social, and governance” principles, which broadly indicates that a fund is taking these factors into account when considering investment risks and outcomes. Among their other “woke” targets is the fossil fuel-backing investment giant BlackRock.

ESG has lots of critics — many claim that ESG doesn’t actually move the needle on climate or diversity or any other ill it’s purporting to improve, arguing that firms are committing impact-washing so they can get a pat on the back without meaningfully changing their investment strategy. For conservatives, the problem with ESG is that it attempts to change too much, impeding on the liberties of the private sector while performing worse financially, too. A 2021 analysis from New York University’s Stern School of Business, however, found that overall, there was a positive relationship between ESG and corporate financial performance.

If anything, a bank is the opposite of “woke.” It’s a powerful institution that has historically served the privileged elite while refusing to serve marginalized groups or offering them predatory terms. SVB was a bank that served major players in Silicon Valley — the industry that ushered in the app-based gig economy, collectors of massive data troves and enablers of surveillance capitalism, and growing partners of the US military, no less — none of which is very popular with the left.

While there isn’t a shred of evidence supporting the claim that SVB’s overt “wokeness” caused its downfall, the heated public reaction around the fall of SVB — and the sense of resentment that the wealthy and powerful are being bailed out when ordinary people wouldn’t receive the same compassion — might be worthy of some reflection.

For Shekar, it underscored a truth about how the public sees the tech and investing worlds. “They don’t see tech as the hub of innovation. They don’t see tech as delivering value for the entire country over the long run,” she said. “Instead, what they’re seeing is an industry that can be arrogant, entitled, and the rich not caring [about] other segments of the US. And I think we have to listen to that for a second and say, ‘Well, why does that perception exist?’”