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Former CEO Greg Becker's Take on Silicon Valley Bank's Collapse

In recent congressional testimony, Greg Becker, the former CEO of the now-defunct Silicon Valley Bank, extended an apology for the bank's dramatic collapse. Becker pointed to escalating interest rates and the impact of social media as significant contributors to the bank's failure.

Greg Becker
Greg Becker

Silicon Valley Bank's Efforts Towards Risk Management

Becker's prepared testimony was shared on Monday by the Senate Banking Committee, where he claimed the bank had been proactive in addressing regulator concerns related to risk management. He said that the bank had strived to manage issues before an "unprecedented" run on the bank precipitated its failure.

Becker's Apology for SVB's Collapse Impact

"SVB's takeover has been both personally and professionally devastating, and I deeply regret the consequences this has had on SVB's employees, clients, and shareholders," Becker expressed during his testimony.

Contrasting Views on SVB's Failure

However, Becker's narrative starkly contrasted those of regulators and other banking industry leaders. They pinned SVB's downfall on its inability to effectively handle interest rate risks and diversify the bank's operations beyond the tech sector, which was heavily concentrated in the Bay Area.

Becker on the Unprecedented Bank Run

In defense of SVB, Becker stated his disbelief that "any bank could weather a bank run of that speed and scale."

Former Executives to Testify on Bank Failures

Becker, former Signature Bank's co-founder, Chairman Scott Shay, and former President Eric Howell are scheduled to testify before the Senate Banking Committee on Tuesday at 10 a.m. EDT (1400 GMT). This will mark their first public appearance since their respective firms crumbled, necessitating rare government intervention to safeguard deposits.

Signature Bank Executives' Counterclaim

Meanwhile, New York-based Signature Bank's former executives, which also collapsed in March, held a different perspective. Per separate testimonies, they maintained that the bank could have endured if regulators had not opted for closure.

Swift Regulatory Actions on Bank Failures

In a swift response, California banking regulators shut down SVB on March 10 after depositors pulled out $42 billion within a day. Following SVB's fall, Signature Bank closed on March 12 due to similar liquidity issues.