The arguments got little traction with senators on both sides of the aisle. Democrats and Republicans on the Senate Banking Committee criticized the executives for taking risky actions or missing obvious problems that directly led to the demise of their banks, while still accepting lucrative pay packages and bonuses, even in the days and weeks leading up to the failures.
“You were paying out bonuses until literally hours before regulators seized your assets,” said Sen. Sherrod Brown, the Democratic chair of the Senate Banking Committee. “To most Americans, a lack of Wall Street accountability tracks with their entire experience with our economy. Workers face consequences; executives ride off into the sunset.”
More than a handful of senators asked if the executives would consider returning part of their compensation, since bank failures are shouldered by the Federal Deposit Insurance Corporation and other banks in the system. Each of the three executives testifying demurred.
Greg Becker, Silicon Valley Bank’s former CEO, took the brunt of the criticism from committee members, although Scott Shay, the former chairman and co-founder of Signature Bank, also came under fire. Signature President Eric Howell also appeared.
Becker used his testimony and answers to senators’ questions to say that Silicon Valley Bank was a victim of a confluence of factors, including a social media-driven bank run. Regulators have said that customers pulled $42 billion of deposits from Silicon Valley Bank on March 9, one day after the bank announced it needed to raise capital.
“You say you took risk management seriously. I find it hard to believe that comment,” said Sen. Tim Scott, the ranking Republican on the committee.
This story is from the May 20, 2023 edition of Techlife News.
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This story is from the May 20, 2023 edition of Techlife News.
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