Washington, D.C. – U.S. Senator Catherine Cortez Masto (D-Nev.) confronted executives from Silicon Valley Bank and Signature Bank at a Senate Banking, Housing, and Urban Affairs Committee hearing on may 16, highlighting how their mismanagement led to the banks’ failures and the impact of those failures on small banks and businesses across the U.S.
The Government Accountability Office (GAO) recently identified the root causes of both bank failures to be ineffective management, poor governance, and unsatisfactory risk management practices.
Citing this report, Senator Cortez Masto asked the former CEO of Silicon Valley Bank, Gregory Becker, the former Chairman and Co-Founder of Signature Bank, Scott Shay, and the former President of Signature Bank, Eric Howell, if “poor management by you and your staff contributed to the failure of the bank.” All three repeatedly failed to admit any responsibility on their part for their bank’s failures.
Cortez Masto is pushing bipartisan legislation that would allow federal bank regulators to claw back all or part of the compensation received by bank executives in the five-year period preceding the failure in the event of a bank failure, and she continued her questioning by asking the executives what they thought the appropriate penalties should be for overseeing these bank failures.
She ended her testimony by asking the executives if they had anything to say to other banks and small businesses who have had to cover the costs of Silicon Valley Bank and Signature Bank’s failures. Mr. Becker stated, “I’m clearly sorry for the impact that SVB has had on clients, including small business and small banks.” Signature Bank executives had no response.
Original source can be found here.
