Two Rules of Banking: Risk Minimization & Capital Preservation for CFOs

This article establishes two foundational banking rules for CFOs: (1) minimize cash risk and exposure through diversification, FDIC coverage, and banking controls, and (2) preserve capital by generating appropriate yield on excess cash without chasing returns that create liquidity risk. The piece is motivated by lessons from the SVB collapse and emphasizes that CFOs should prioritize safety over incremental yield gains.