On 5/16/2023, Top executives at Silicon Valley Bank and Signature Bank largely avoided taking responsibility for their banks’ dramatic failures at a Senate hearing, instead using their time to assign blame to events they said were largely out of their control. Greg Becker, Silicon Valley Bank’s former CEO, took the brunt of the criticism from committee members. An exasperated Sen. John Kennedy, R-Louisiana, pointed out that Silicon Valley Bank even sold off financial contracts, known as hedges, that could have mitigated some of the impact of rising rates. He called the bank’s interest rate management “bone deep, to the marrow, stupid.” Becker was criticized repeatedly for handing off the bank’s interest rate risk issues to a committee instead of being more directly involved, as well as the fact that Silicon Valley Bank was repeatedly found deficient in multiple parts of its businesses by bank regulators. He was also criticized for going to Hawaii immediately after his bank failed. Becker received compensation valued at roughly $9.9 million in 2022, and also sold stock in the company only a few weeks before it failed.
Q: You spent a lot of time doing pronoun seminars Q: I actually spent no time beyond introducing
Kennedy: How did you speak in seminars, didn’t you? Uh, what’s the pronoun seminars?
Witness: Um, I introduced a seminar organized by 300 of my colleagues. Just as I went to…
Kennedy: Yeah, tell me what it is. You let you entered, you… You spent a lot of time doing pronoun seminars, uh, lecturing people about how they ought to use the right pronoun, gender-neutral pronouns, didn’t you?
Witness: I actually spent no time beyond introducing them.
Well, I could show the seminars, but I won’t do it. I was… What did that Senator
Chairman: Kennedy Your time is expired, Senator Reid, Rhode Island.
Kennedy: Never mind.
Q: take their hard-earned money & trust it to you A: They enjoyed watching, participating
Kennedy: Uh, can you play the video for me, Mr. Shea? I want to ask you… Play it. Still looks like me.
Video: I happen to know for a fact that won’t happen. Seriously, why not? Because…
Kennedy: Mr. Shea, you’re in that video, aren’t you?
Mr. Shea: Yes, I’m in that video.
Kennedy: And you showed that video to the public.
Mr. Shea: Um, that video was designed as a morale-boosting
Kennedy: but did you show it to the public?
Witness: It was shown at the employee parties and used shown for…
Kennedy: But did the public see it?
Witness: They may have seen that. Yes
Kennedy: And you were trying to invite people to take their hard-earned money and trust it to you, to spend it wisely, and you showed them this video.
Witness: That video had a positive impact on, yeah.
Kennedy: Your bank went broke.
Witness: Enjoyed who enjoyed watching, participating.
Kennedy: Your bank went broke.
Kennedy asked “You’re the CEO … you don’t know whether you were hedged or not?”
Kennedy: You didn’t have Hedges, did you?
Witness: Senator, as previously mentioned, the decision around Hedges was made by our asset liability committee.
Kennedy: you were the CEO of the bank. You didn’t have Hedges, did you?
Witness: Senator, there were Hedges that were put in place, but I don’t recall the details around when they were put in place.
Kennedy: You’re the CEO, and you didn’t, have 55% of your assets in government bonds, and you don’t know whether you were hedged or not?
Witness: Senator, as previously mentioned, I don’t have access to my SVB documents. So, well, here’s what
Kennedy: I know that, and I wasn’t CEO. You weren’t hedged. Now, if you’d bought those Hedges, that would have cut into your profits, wouldn’t it?
Witness: Senator, I don’t know the details of the decisions that the team were evaluating
Hedges cost money, means less profit, leads to your bonus less
Kennedy: but if you bought a hedge, the Hedge cost money, and it would have decreased your profits, wouldn’t it? Do Hedges cost money?
Witness: Yes, they do.
Kennedy: And so, if you bought Hedges, you’d have less money, right?
Witness: Senator, it depends upon… Yes, they would cost money, but it depends upon how they…
Kennedy: And if you’d made less money, that would have affected your bonus, wouldn’t it?
Senator, our compensation was predominantly long-term in nature. And so, I know there’s been lots of discussions about compensation being short-term.
Kennedy: You made a really stupid bet that went bad, didn’t you? and the taxpayers of America had to pick up the tab for your stupidity, didn’t they?
Witness: Senator, there were a series of events, unprecedented events that occurred that led us to where we are today.
Kennedy: No, this wasn’t unprecedented. This was bone-deep, down to the marrow stupid. You put all your eggs in one basket. You put all your eggs in one basket
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Scandalous Senate Hearing: SVB CEO’s Stupid Bet, Shocking Negligence & Bank Collapse Exposed!