Silicon Valley Bank’s Ex-C.E.O. Is ‘Truly Sorry’ but Deflects Blame
The collapse was precipitated by the bank’s decision to buy up government bonds in an era of low interest rates, particularly during the pandemic. Those bonds dropped in value when runaway inflation caused policymakers to quickly raise interest rates, making relatively low-yielding, older bonds less attractive to investors and blowing a hole in SVB’s books.
SVB also had an unusually high proportion of accounts with more than $250,000 in deposits, the cutoff to be government insured in the event of a failure, making it particularly at risk of a bank run — as depositors who were worried about their cash rushed to withdraw it.
Mr. Becker hadn’t publicly addressed the collapse until Tuesday’s hearing. A three-decade SVB veteran, he became chief executive in 2011 and oversaw its rapid growth in the following years.
“I worked at a place I truly loved,” he said, calling himself “truly sorry” for what happened.
Mr. Becker said that at the time of SVB’s failure, he was working with regulators to shore up the bank. He said SVB’s large, uninsured accounts were a function of its focus on businesses and individuals whose own wealth was growing, and that he could not have imagined they would all pull en mass because of their long history with the bank.
He blamed the media for raising questions about the firm’s financial disclosures and government officials for allowing inflation to spike to the point where rapid interest rate increases were necessary. Asked to identify any of his own failures, he could not.
Source: The New York Times
