8/2/2023 0 Comments Shadwen play timeAnd still, Becker still received a $1.5 million bonus as part of his 2022 compensation package. Elizabeth Warren quipped: “Your opinion on what is a responsibly managed bank is…laughable.”Įxecutive compensation was a recurring issue.Īt the time of its collapse, SVB had 31 unresolved supervisory warnings. To Shay, the former Signature chairman, Sen.“It’s hard to believe a 30-year bank executive, and CEO for 12 years, should have needed a roadmap from the regulators to find the obvious problems that needed to be fixed and weren’t.” Becker, you’ve blamed pretty much everyone else for SVB’s failures,” Brown, the banking committee chair, said. Hearings like this are known for their grandstanding, but lawmakers really made a meal of it on Tuesday.Īcross party lines, the outrage was palpable. How many ways can we say the word “stupid”? ICYMI: Last month, the Federal Reserve’s autopsy report called SVB’s failure a “textbook case of mismanagement,” while also owning its own supervisory shortcomings. “It sounds a lot like my dog ate my homework,” said Democratic Sen. “Rumors and misconceptions spread quickly online,” sparking the bank run, Becker told lawmakers.Īnd of course, Becker says, the Fed raised interest higher and faster than expected, even though inflation was supposed to be “transitory.”īut did the CEO of the bank do anything wrong that might have contributed to its instability? Becker said he couldn’t think of anything. He noted that SVB had been compared to Silvergate - a crypto-focused Southern California lender that announced its liquidation days before SVB collapsed - and that news reports and investors wrongly lumped the two banks together. Greg Becker, former CEO of Silicon Valley Bank, left, testifies next to Scott Shay, former chairman and co-founder of Signature Bank, and Eric Howell, former president of Signature Bank, during a Senate hearing. In his testimony, Becker said he was “truly sorry” for the bank’s collapse, blaming a “series of unprecedented events.” To hear Becker tell it, Silicon Valley Bank was the victim of a collision of unprecedented rate hikes from the Federal Reserve, a bit of bad press and a social media panic. The executives conducted a masterclass in deflecting blame for their banks’ failures. Here are the key takeaways from the Senate hearing: Unsurprisingly, the banking crisis came up. The Fed’s top banking watchdog was also on the Hill, along with other regulators, testifying in the House as part of his semiannual obligation. The grilling from senators lasted just over two hours. Here’s the deal: Lawmakers on the Senate Banking Committee were unusually united in their contempt for the way the three men - Greg Becker of SVB, as well as Scott Shay and Eric Howell of Signature - failed to mitigate risks and raked in millions in compensation while their banks imploded. Their takeaway from the experience of watching their companies crumble under their feet: Everyone screwed up but us. More than two months after the collapse of Silicon Valley Bank and Signature Bank triggered a financial earthquake, three former executives spoke publicly for the first time in testimony before a Senate committee Tuesday.
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