{"id":1455,"date":"2023-04-28T14:27:46","date_gmt":"2023-04-28T18:27:46","guid":{"rendered":"https:\/\/ifintechworld.com\/banking\/former-silicon-valley-bank-ceo-greg-becker-should-testify-before-congress\/"},"modified":"2023-04-28T14:27:48","modified_gmt":"2023-04-28T18:27:48","slug":"former-silicon-valley-bank-ceo-greg-becker-should-testify-before-congress","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=1455","title":{"rendered":"Former Silicon Valley Bank CEO Greg Becker Should Testify Before Congress"},"content":{"rendered":"
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Silicon Valley Bank had been experiencing weak compliance and internal controls with Bank Secrecy Act\/Anti-Money Laundering, Current Expected Credit Losses, liquidity risk management, interest rate risk measurement, data protection, auditing framework, and even the Volcker Rule, in many cases going back to 2016. Today, as promised, Vice Chair for Supervision of the Board of Governors of the Federal Reserve Board System Michael Barr released a report where the Federal Reserve investigated itself about supervisory issues with Silicon Valley Bank. Pundits had been waiting to see if this would be a great Federal Reserve mea culpa<\/em>. In part it was. As I posted on Twitter<\/a>, the incredible dysfunction at Silicon Valley Bank is evident in the Silicon Valley Bank Review Supervisory Materials. What was a surprise to me was that there were serious problems at Silicon Valley Bank since 2016, and that not only did SVB\u2019s
\n VB
\n <\/fbs-ticker> immediate regulators the San Francisco Federal Reserve Bank and the California Department of Financial Institutions knew, but also the Federal Deposit Insurance Corporate and the Consumer Financial Protection Bureau also knew about these issues.<\/p>\n

It has been a month since Silicon Valley Bank failed, and its mismanagement continues to exacerbate uncertainty U.S. regional banks\u2019 financial health. Soon after its demise, numerous market participants, academics, politicians, and analysts, such as I, weighed in on the lack of oversight, weak risk management, and lack of interest rate and liquidity measurements and control at SVB. Already at the end of March, we had heard from Michael Barr, Vice Chair for Supervision of the Board of Governors of the Federal Reserve Board System, Martin Gruenberg Chairman of the FDIC, and Nellie Lang, Under Secretary for Domestic Finance of the U.S. Treasury. They were grilled by members of the House Financial Services Committee and the Senate Banking, Housing, and Urban Affairs.<\/p>\n

Where Is Former SVB CEO Greg Becker?<\/strong><\/p>\n

Like in Rashomon, Akira Kurosawa\u2019s seminal film, we have heard the story of Silicon Valley Bank\u2019s demise from many perspectives. However, we have yet to hear from the responsible actors in this saga: Silicon Valley Bank\u2019s former Chief Executive Officer Greg Becker and SVB\u2019s Board of Directors. All the San Francisco Federal Reserve\u2019s letters were sent to them.<\/p>\n

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The Senate Banking Committee and the House Financial Services Committee need to request that key SVB executives like SVB\u2019s former and current Chief Executive Officer, Chief Financial Officer, and Chief Risk Officer testify before the public. They were the ones running the bank, not bank or securities regulators or the rest of us who have weighed in about SVB\u2019s painful implosion.<\/p>\n

At the very least, here are questions, they need to answer:<\/p>\n

\u00b7 Since the bank failed on your watch, do you think you really earned your salary and bonus?<\/p>\n

\u00b7 If you have to lay-off employees who were not responsible for SVB\u2019s failure, will you pay for their unemployment benefits rather than foist this responsibility on unemployment coffers?<\/p>\n

\u00b7 Please define interest rate and liquidity risks and identify where they exist in your bank.<\/p>\n

\u00b7 Did your asset and liability management group conduct gap analysis at least every month to show how interest rate rises and decreases can impact your assets and liabilities?<\/p>\n

\u00b7 Did you calculate the level of high-quality liquid assets you had to keep you liquid if you had cash outflows, especially in periods of stress?<\/p>\n

\u00b7 Why did Chief Risk Officer xxx leave and why were you without a CRO
\n CRO
\n <\/fbs-ticker> for xxx months?<\/p>\n

\u00b7 CEO Becker, why did you flee to Hawaii?<\/p>\n

SVB\u2019s board members also should testify. The Federal Reserve makes it very clear that the role of a bank\u2019s board is to:<\/p>\n