Connect with us

Hi, what are you looking for?

Top Stories

Editor's Pick

Ex-SVB CEO says rate hikes, withdrawals sank US lender

REUTERS

WASHINGTON — Greg Becker, former Chief Executive Officer (CEO) of failed lender Silicon Valley Bank (SVB), apologized in congressional testimony for its “devastating” collapse while citing rising interest rates and mounting withdrawal requests as key causes of its demise.

The bank was responsive to regulator concerns about its risk management and working to address issues when an “unprecedented” bank run led to its failure, Mr. Becker wrote in prepared testimony published on Monday by the Senate Banking Committee.

“The takeover of SVB has been personally and professionally devastating, and I am truly sorry for how this has impacted SVB’s employees, clients and shareholders,” he said.

Mr. Becker’s account contrasts with those of regulators and banking industry executives who blamed SVB’s leadership for its failure to manage interest rate risks or diversify its business beyond the highly concentrated tech sector in the Bay Area.

Mr. Becker said he did not believe “that any bank could survive a bank run of that velocity and magnitude.” He also rebuffed regulators’ assertions that SVB failed to manage interest rate risks, saying that up until late 2021, the Federal Reserve had indicated that interest rates would remain low and that rising inflation was merely transitory.

Fed supervisors did not fully appreciate the problems at SVB and failed to escalate deficiencies even after they were identified, the regulator said in a report last month.

Mr. Becker, along with Signature Bank’s former co-founder and Chairman Scott Shay and former President Eric Howell, are set to testify before the Senate Banking Committee on Tuesday at 10 a.m. EDT (1400 GMT). They will appear publicly for the first time since their firms collapsed.

The former executives for New York-based Signature Bank, which also failed in March, maintained the bank could have survived had regulators not chosen to close it, according to separate testimony.

Signature’s failure was caused by “poor management” and a pursuit of “rapid, unrestrained growth” with little regard for risk management, the Federal Deposit Insurance Corp. (FDIC) said last month.

California banking regulators moved quickly to shut SVB down on March 10 after depositors withdrew $42 billion in 24 hours. Two days later, regulators closed Signature.

Federal regulators invoked emergency powers to backstop all deposits at SVB and Signature, even those above the limit guaranteed by the FDIC. Officials facilitated the sale of SVB and Signature to other banks.

The hearings will be the first chance for lawmakers to grill the three executives.

Some lawmakers have also rebuked Mr. Becker for awarding bonuses and questioned whether he and others profited from stock sales before SVB’s collapse.

Mr. Becker defended those sales in his testimony, claiming he regularly sold shares underlying his stock options as part of a plan. — Reuters

You May Also Like

Editor's Pick

THE BOARD of directors of Ayala-led ACEN Corp. has approved the availing of credit facilities amounting to about P7.8 billion from two financial institutions....

Editor's Pick

STOCK PHOTO Image by StockSnap from Pixabay HYDERABAD – When Saloni Singh was little, she would beg then brawl with her brother for a turn on...

Editor's Pick

HOLCIM PHILIPPINES FACEBOOK PAGE LOCAL cement manufacturer Holcim Philippines, Inc. has partnered with South Korean cement and concrete producer Sungshin Cement Co. Ltd. to...

Economy

<?xml encoding=”utf-8″ ??> The UK has agreed landmark post-Brexit trade deals with Australia and New Zealand to unleash British businesses and deliver on the...

Disclaimer: SecretsOfRichDads.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice.
The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

Copyright © 2022 Secrets Of Richdads. All Rights Reserved.