Former Silicon Valley Bank CEO Greg Becker was accused of ‘stupid’ mismanagement by Louisiana Senator John Kennedy during a US Senate hearing on bank failures
The top executives at SVB and another failed lender, Signature Bank, as well regulators overseeing them appeared at separate congressional hearings on Tuesday to be grilled by senators demanding an account of why the banks collapsed.
In his comments, former SVB CEO Greg Becker painted a picture of an unprecedented, unforeseeable crisis thatdespite the bank taking risk management seriously and having liquidity of around $80 billion at the end of last year. "I was the CEO of Silicon Valley Bank, I take responsibility for what ultimately happened," Becker said."Why did you ignore admonitions from regulators?" Senator Sherrod Brown, a Democrat, said in his opening statement.Greg Becker, former president and CEO of SVB, speaks at the 2022 Milken Institute Global Conference in Beverly Hills, California, U.S., May 3, 2022.
SVB's downfall was triggered by holdings of long-term Treasuries losing value as interest rates rose quickly - a risk the bank had not hedged. It was instead forced to borrow in the short term at higher rates while maintaining long-term loans on its books that were made when rates were low. Becker rebuffed regulators' assertions that SVB failed to manage interest rate risks in his prepared testimony, saying that up until late 2021, the Federal Reserve had indicated that interest rates would remain low and that rising inflation was merely transitory.
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