WASHINGTON — Former Silicon Valley Bank CEO Greg Becker continued to take heat from both sides of the aisle in his
Becker was joined by Signature Bank founder Scott Shay and former First Republic CEO Michael Roffler at the hearing, which was hosted by two subcommittees of the House Financial Services Committee. Shay appeared alongside Becker
Roffler blamed the collapse of First Republic on a lack of confidence sparked by the failure of Silicon Valley Bank and Signature Bank.
"While First Republic understood and disclosed the earnings risks we were facing in 2023, we could not have anticipated that Silicon Valley Bank and Signature Bank would fail, or that the failure of those banks would trigger substantial deposit outflows at our bank," he said. "Instead of dealing with temporary decreased earnings due to interest rate pressures, First Republic was contaminated overnight by the contagion that spread from the unprecedented failures of two regional banks."
Most lawmakers laid most of the blame for the regional banking turmoil on Silicon Valley Bank. But while Becker fielded bipartisan attacks on his compensation, particularly his bonuses, in Tuesday's Senate hearing, Republican lawmakers appeared more interested in questioning the former CEO about Silicon Valley Bank's interactions with the Federal Reserve, particularly the San Francisco Fed.
"We are not here to defend management at any of the banks that failed or to put anyone on trial for prosecution," said Rep. Andy Barr, R-Ky., the chairman of the financial services subcommittee. "In looking at the recent bank failures and the continued turbulence in our banking system, it is important to acknowledge that the bank failures did not occur in a macroeconomic vacuum."
Becker, in particular, took the brunt of lawmaker anger. His bank was the first to fail, and the high share of uninsured deposits and lack of hedging against interest rate risk took heavy criticism from lawmakers.
"Such poor mismanagement, so reckless," said Rep. Ann Wagner, R-Mo. "I'm just disgusted."
The ire came from both sides of the aisle.
"I think you're going to go down in history as absolutely being the most irresponsible leader of a bank in the history of this country," said Rep. David Scott, D-Ga., to Becker.
Roffler said that the federal government should consider
The Federal Deposit Insurance Corp., has released a report suggesting that Congress look at
Roffler said that changes to the deposit insurance system could help "calm the waters."
"At the end of the day, when the panic sets in, it's really hard to regain confidence," Roffler said.
