People walk by a Manhattan branch of Signature Bank which was closed by bank regulators on Sunday on March 13, 2023 in Latest York City.
Spencer Platt | Getty Images
WASHINGTON — Former top executives of the failed Silicon Valley Bank and Signature Bank will testify before the Senate on May 16, the chamber’s Banking Committee announced late Wednesday.
Greg Becker was chief executive of the California-based SVB on the time of its March 10 collapse. Scott Shay and Eric Howell were the chairman and president, respectively, of Latest York-based Signature Bank when it collapsed just days after SVB’s failure.
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The hearing will mark the primary time that any of the lads has spoken in public in regards to the bank failures that rocked U.S. financial markets. News that the executives would testify got here after Becker declined a previous invitation to seem at a March 28 committee hearing.
“You should answer for the bank’s downfall,” committee Chairman Sen. Sherrod Brown, D-Ohio, and rating member Sen. Tim Scott, R-S.C., wrote of their March 23 letter to Becker.
Former Signature Bank CEO Joseph DePaolo received an identical letter on the time. DePaolo will not be expected to testify next week.
The previous bank executives can expect a grilling from senators on either side of the aisle.
Within the two months for the reason that banks collapsed, CNBC has reported on stock sales by 4 top executives at SVB within the weeks and months ahead of the bank’s collapse. Senators have followed up, and asked Securities and Exchange Commission chairman Gary Gensler to research the sales.
Greg Becker, President and CEO of Silicon Valley Bank (SVB), speaks through the Milken Institute Global Conference on May 3, 2022 in Beverly Hills, California.
Patrick T. Fallon | AFP | Getty Images
Tough questions have also been raised about why Becker and other executives at SVB were paid their annual bonuses just hours before the federal government took over the bank.
Becker also can expect to face questions on why Silicon Valley Bank ignored repeated warnings from regulators that the bank would face a risk of collapse if rates of interest rose quickly — which they did because the Federal Reserve repeatedly hiked rates starting last yr.
Some topics will likely be off limits, nonetheless. The March letter to Becker said senators would follow questions that didn’t require him to reveal “confidential supervisory information.”
“You furthermore mght don’t need bank records and files to offer informative testimony,” wrote Brown and Scott.
In a separate hearing May 18, the committee will hear from top federal bank regulators, including Michael Barr, vice chair for supervision on the Federal Reserve, Martin Gruenberg, chairman of the Federal Deposit Insurance Corporation, Michael Hsu, acting Comptroller of the Currency, and Todd Harper, chair of the National Credit Union Administration.
Barr and Gruenberg are each expected to face additional questions on oversight at SVB, Signature and the most recent bank to fail, California-based First Republic Bank.
The slow-motion collapse of First Republic over the past several months culminated this weekend in a federal takeover and a fast sale to JPMorgan Chase, announced early Monday morning.
Along with the federal witnesses, two high-profile state regulators responsible partly for the oversight of SVB, First Republic and Signature Bank may also appear before the committee: California Department of Financial Protection and Innovation Commissioner Clothilde Hewlett and Latest York State Department of Financial Services Superintendent Adrienne Harris.
