Bank executives dodge responsibility for collapses under congressional pressure
The former CEO of Silicon Valley Bank was the only executive of three to claim responsibility for the collapse of his respective regional bank Wednesday during a joint hearing of House Financial Services subcommittees.
The joint hearing saw the former chief executives of Silicon Valley Bank, Signature Bank and First Republic Bank under congressional scrutiny for the failure of their respective financial institutions.
Rep. Bill Huizenga (R-Mich.), Subcommittee on Financial Institutions and Monetary Policy chair, asked the three bank executives if they accepted responsibility for the collapses of their banks.
“Congressman, as CEO, I think you have to take responsibility for the ultimate outcome of your institution,” former Silicon Valley Bank CEO Greg Becker said.
Signature Bank’s Co-founder and former Chairman, Scott Shay, dodged accountability, saying he instead regretted federal regulators’ seizure of the financial institution he led.
“As chairman of the board, I think I did a responsible role throughout fulfill my duties,” Shay said. “I'm sorry that the bank was seized by the regulators.”
“OK, so I take that as a no,” Huizenga said.
First Republic Bank’s former CEO and President Michael Roffler said the bank’s collapse was “unforeseeable.”
“And the contagion spread very quickly and panic is very hard to control. What I feel responsible for is for our colleagues each and every day, and our clients each and every day to make sure they're taken care of and supported during this time,” Roffler said.
“Sounds like a no,” Huizenga said. “So congratulations, Mr. Becker. You're the only one to man up and actually take responsibility for that.”
Becker’s comment seemed in opposition to his statements during a Senate Banking Committee hearing Tuesday, during which he refused to acknowledge SVB executives’ mistakes and defended millions in stock he sold shortly before the bank’s collapse.
Congressional hearings this week delved into the roles federal regulators and CEOs played in a recent series of bank failures. Top executives at the fallen banks have continued to blame preceding events that they claim were out of their control or unpredictable.
Becker, Shay and Roffler echoed those beliefs when lawmakers asked about potential future solutions they had or what they would have done differently.
“I've thought about that a lot over the last several months,” Becker said. “What I tried to describe in my written testimony, is that the facts that we had, that I had when I made my decisions, and I believe my team had when they made their decisions, and I truly do believe they made the best decisions, as did I with the information that we have.”
Rep. Juan Vargas (D-Calif.) asked the three executives for specific solutions to the unprecedented events that led to the slew of regional bank collapses this year.
“What can we do? What can the government do to prevent this, so people don't lose their money?”
Roffler said that the contagion and sheer panic following the collapses of other banks is largely unsolvable.
“Sitting here today, it's very hard for me to give any good advice for that,” Roffler said. “At the end of the day, when the panic sets in, it's really hard to regain confidence.”