Former SVB, Signature Bank Executives to Face Senate Panel -- WSJ

By Gina Heeb and Andrew Ackerman

Former Silicon Valley Bank Chief Executive Greg Becker and two ex-executives from Signature Bank will appear in front of a Senate committee Tuesday, where the chairman is expected to blame senior management for the pair of failures in March.

Senate Banking Committee Chairman Sherrod Brown (D., Ohio) said the banks grew too fast and repeatedly ignored warnings from federal and state officials in the face of "glaring risks" from customer and industry concentration, according to prepared remarks released ahead of the hearing.

"We know your banks were fatally mismanaged," Mr. Brown said. "When you put other people's money, and our broader economy, at risk, there must be accountability for that level of mismanagement."

The former executives haven't publicly spoken since SVB and Signature were seized by regulators in rapid succession two months ago, after spooked customers yanked deposits en masse from the banks. The failures erupted a crisis of confidence across the sector that has continued despite federal backstops and assurances from regulators that the system is safe.

SVB and Signature, with a respective $209 billion and $110 billion in assets in December, were the second- and third-largest banks to fail in U.S. history at the time. When First Republic Bank was seized and sold to JPMorgan Chase this month it became the second-largest collapse, after Washington Mutual in 2008.

Mr. Becker plans to apologize and say that no bank could have survived the unprecedented deposit run that SVB saw in March, according to his prepared remarks. Former Signature Chairman Scott Shay and former Signature President Eric Howell are expected to tell lawmakers that they believe regulators acted too quickly to seize the bank.

Officials across Washington have launched probes into the failed banks and the agencies that oversee them. The House Financial Services Committee will separately question financial regulators Tuesday. Senior officials from the Federal Reserve, the Federal Deposit Insurance Corp., the National Credit Union Administration and the Office of the Comptroller of the Currency are scheduled to appear.

Write to Gina Heeb at gina.heeb@wsj.com and Andrew Ackerman at andrew.ackerman@wsj.com

(END) Dow Jones Newswires

May 16, 2023 09:00 ET (13:00 GMT)

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