Tester to Silicon Valley Bank Exec: “What were you doing?”
At Senate Banking Committee hearing, Senator slams SVB CEO for failure to prevent collapse
In his continued push to hold executives accountable in the wake of recent bank failures, U.S. Senator Jon Tester on Tuesday pressed former Silicon Valley Bank (SVB) CEO Greg Becker on the bank managements’ risky behavior and failure to prevent a collapse.
Tester began his line of questioning by asking Becker point-blank about his failure to prevent the collapse of SVB: “Mr. Becker, if you couldn’t see the real risk coming, what were you doing leading this bank?”
Tester then pushed back on Becker’s suggestion that SVB leadership was responsive to warnings from federal regulators:
“I would disagree that you were very responsive with the feedback they were given. Did you read the Fed report? It shows that the regulators identified deficiencies and then quite frankly, you didn’t proceed with those deficiencies… The truth is, it’s hard for me to understand how somebody who sat on the Fed, somebody who is in tune with what’s going on in the economy, somebody that had regulators telling them you’ve got stuff that has to be dealt with here, didn’t take the kind of response that should have been taken.”
Tester concluded his remarks by emphasizing that because of Becker and SVB’s inept management, other banks – such as local community banks that rural communities across Montana rely on – may have the screws put on them for no fault of their own.
“The fallout of this, by the way, the fallout of this isn’t just Silicon Valley Bank going down. It’s the fact that we’re gonna have a lot of banks out there that are going to get the screws put to them because you guys didn’t react to the recommendations that were made by the Fed and hopefully other regulators, but absolutely by the Fed. And I just don’t understand how for three years this went on and, and nothing was done and it ends up where that bank no longer exists.”
Tester has led the charge to ensure bank executives and federal regulators are held accountable for recent bank failures.
Tester has led a letter to the Securities and Exchange Commission (SEC) calling for an investigation into Bank executives’ stock sales ahead of the collapse, sent a letter to FDIC Chairman Martin J. Gruenberg and Federal Reserve Chairman Jerome H. Powell urging federal financial regulators to use every tool at their disposal to claw back reported bonuses received by bank executives, and has repeatedly pressed officials on their failure to “drop the hammer” on bank management.