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☆ Elizabeth Warren and Josh Hawley just teamed up on a bill that would let the government 'clawback lavish pay and bonuses when executives explode their bank'
▼ + stars: | 2023-03-29 | by ( Juliana Kaplan | Ayelet Sheffey | ) www.businessinsider.com time to read: +4 min

Elizabeth Warren and Josh Hawley are teaming up to put the heat on executives of failed banks. Mike Braun and Catherine Cortez Masto, introduced a bill called "Failed Bank Executives Clawback Act," which would require that federal regulators "claw back" compensation of executives from the five-year period before their bank fails. "It's time for Congress to step up and strengthen the law so bank executives bear the cost of failure, not line their pockets and walk away scot-free." In the days and weeks following Silicon Valley Bank's collapse, lawmakers on both sides of the aisle — and President Joe Biden — have scrutinized the circumstances that led to the bank's failure. Warren has also pushed to roll back 2018 tweaks to the Dodd-Frank Act, which raised the threshold of holdings that require banks to have greater oversight.

☆ What to expect from the Senate hearings on recent bank failures
▼ + stars: | 2023-03-28 | by ( Nicole Goodkind | ) edition.cnn.com time to read: +4 min

New York CNN —Silicon Valley Bank’s liquidity crisis and subsequent downfall sent waves of panic through the financial system in early March, setting off a chain reaction of chaos with which regional banks are still grappling. On Wednesday, the House Financial Services Committee will continue with their own line of questioning. Sen. Brown has called for the executives of Silicon Valley Bank to be held accountable for the bank’s failure. “Our banking system is sound and resilient, with strong capital and liquidity,” Barr said. The failures of SVB and Signature Bank, he wrote, “demonstrate the implications that banks with assets over $100 billion can have for financial stability.

☆ Key lawmakers say upcoming hearings on bank failures aim to boost U.S. confidence in banking sector
▼ + stars: | 2023-03-24 | by ( Chelsey Cox | ) www.cnbc.com time to read: +4 min

WASHINGTON — A bipartisan group of lawmakers overseeing the recent turmoil in the banking sector said Wednesday that they aim to increase Americans' confidence in the banking industry after Silicon Valley Bank and Signature Bank collapsed over the last two weeks. Regulators and lawmakers are also trying to contain further damage to the economy and reinforce confidence in the banking system. Sen. Tim Scott, a South Carolina Republican and ranking member of the Senate Banking Committee, also said writing new laws should take a back seat at the hearings to investigating what happened. We can't legislate that either in the financial sector or among financial institutions management, nor with the regulators." Sen. Sherrod Brown, an Ohio Democrat and chairman of Senate Banking Committee, compared the SVB collapse to the devastating train crash in East Palestine, Ohio.

☆ I'm an associate at SVB. I love the culture of this company, but I'm livid at the failures of management.
▼ + stars: | 2023-03-23 | by ( Emmalyse Brownstein | ) www.businessinsider.com time to read: +6 min

One current SVB employee is on the front lines of what has been dubbed the worst bank crisis since 2008. The best thing about working at SVB is its tight-knit, supportive culture: "We had a good thing going." I work at SVB, and as you might surmise, the situation sucks. What makes it really sting, though, is how the awesome culture I've experienced here is forever stained by those failures. And even now, it feels like the whole bank has really rallied around trying to show that we're more than just a bank.

☆ Failure of Silicon Valley Bank Mirrors the Myth of the Wild West
▼ + stars: | 2023-03-19 | by ( Adam Rogers | ) www.businessinsider.com time to read: +10 min

As Silicon Valley Bank went down the tubes, it wasn't surprising that the loudest mouths in Techworld started demanding that the federal government cover everyone's losses. They were pioneers on the frontier of tech and finance, and as such they acted the way pioneers always do. Myths of the frontiersIt's unfashionable for people in the tech industry to dispute the central role that government-funded infrastructure and academic projects have played in the development of Silicon Valley and the digital age. Shout down into Silicon Valley and you'll hear echoes of this same pioneer myth. They see themselves as heroes not of a Western frontier but of space — the Final one — as refracted by the legendary writers of the Golden Age of Science Fiction.

"No one is above the law," Biden said in the statement, "and strengthening accountability is an important deterrent to prevent mismanagement in the future." The current law "limits the administration’s authority to hold executives responsible," he said. Specifically, Biden is asking Congress to give the Federal Depository Insurance Corp greater authority to claw back compensation, "including gains from stock sales – from executives at failed banks like Silicon Valley Bank and Signature Bank," the White House said in a second statement. "The President urges Congress to expand the FDIC’s authorities to expressly cover cases like this" the White House statement said, citing Becker's stock sales. The president is also asking Congress to give the FDIC more authority to ban bank executives from the industry when their banks go into receivership, and to fine bank managers whose banks fail.

☆ Fed Chair Jerome Powell reportedly blocked a statement on regulatory flaws that led to SVB's collapse
▼ + stars: | 2023-03-17 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +3 min

The NYT reported that Fed Chair Powell blocked a mention of regulatory failings in a report on SVB. The final joint statement on SVB's fall speaks mostly of regulators' work since the 2008 crisis. Instead, the final statement only spoke positively of financial regulation, praising the reforms put in place after the 2008 Financial Crisis. Silicon Valley Bank was taken over by the FDIC last Friday, sparking an intense sell-off in bank stocks and wavering confidence in the US banking system. President Biden has promised to tighten regulation in the wake of SVB's failure, assuring Americans that the US banking system is safe.

WASHINGTON, March 17 (Reuters) - U.S. President Joe Biden said on Friday the banking crisis has calmed down after the recent collapse of Silicon Valley Bank (SVB) (SIVB.O) and Signature Bank (SBNY.O). "Yes," Biden told reporters at the White House on Friday when asked if the banking crisis had calmed down. Californian regulators shuttered Silicon Valley Bank last Friday and appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. Earlier on Friday, Biden had called on Congress to give regulators greater power over the banking sector, including leveraging higher fines for managers, clawing back executives' compensation and barring officials from failed banks. Silicon Valley Bank CEO Greg Becker sold $3.6 million worth of shares in late February, about two weeks before the bank entered FDIC receivership, Bloomberg and CNBC reported.

☆ Executives at Silicon Valley Bank and First Republic Bank sold millions of stock right before the crash
▼ + stars: | 2023-03-17 | by ( Matthew Fox | ) www.businessinsider.com time to read: +3 min

Executives at First Republic Bank and Silicon Valley Bank sold stock right before the banking crisis. First Republic's chief risk officer sold shares two days before the Silicon Valley Bank implosion. Today, SVB stock remains halted but is essentially at zero after Silicon Valley Bank was taken over by the FDIC and SVB Financial filed for bankruptcy. First Republic Bank executives also managed to sell stock right before the crash. All-in, insiders at First Republic Bank sold about $12 million in stock in 2023 at an average price of just below $130 per share.

☆ Silicon Valley Bank's CEO and CFO were ousted but other bank executives still have their jobs — and they're wooing new customers, acting CEO told clients.
▼ + stars: | 2023-03-17 | by ( Kali Hays | Darius Rafieyan | Dakin Campbell | ) www.businessinsider.com time to read: +5 min

Clients were told that the CEO and CFO are out of SVB, while other managers remain. His message to them: Silicon Valley Bank was fully operational, protected by unlimited FDIC insurance even for new deposits, and all business was functioning normally, as if the bank run on Friday never happened. In this case, Silicon Valley Bridge Bank is a full-service bank." Retaining management is, perhaps, a good outcome for the moment for SVB employees who have been cast in a pall of uncertainty since last week. SVB employees now seem to fall into three groups, according to the recruiter, who has spoken with SVB employees in recent days.

☆ Silicon Valley Bank ex-CEO backed Big Tech lobbying groups that targeted Dodd-Frank, sought corporate tax cuts
▼ + stars: | 2023-03-16 | by ( Brian Schwartz | ) www.cnbc.com time to read: +7 min

Greg Becker, President and CEO of Silicon Valley Bank (SVB), speaks during the Milken Institute Global Conference on May 3, 2022 in Beverly Hills, California. Both trade organizations included Silicon Valley Bank as a member before its failure, according to archived versions of their websites. The organization has spent more than $2 million since the start of 2020 on lobbying Congress, according to its lobbying disclosure reports. Federal records show that the Silicon Valley Leadership Group has not filed lobbying disclosure reports since 2009. Becker was chairman of the Silicon Valley Leadership Group from 2014 through 2017, according to an archived version of his SVB bio page.

☆ Premarket Stocks: Who do we blame for the fall of SVB?
▼ + stars: | 2023-03-16 | by ( Nicole Goodkind | ) edition.cnn.com time to read: +8 min

Blame the Fed: SVB’s downfall was largely caused by a record $42 billion bank run that left the bank in desperate need of cash. But the Fed’s rate hikes had undermined the value of bonds, a critical source of capital for SVB. “The Federal Reserve failed as a bank supervisor,” he wrote. On Capitol Hill, frequent Fed critic Sen. Elizabeth Warren has been quick to blame Federal Reserve Chair Jerome Powell for a lack of oversight. Blame SVB: Others say the blame should be placed on the banks themselves.

Greg Becker, who was the longtime CEO of Silicon Valley Bank, pictured last year. "Looks like Silicon Valley Bank is in some deep shit," Uncommon Capital general partner Jamie Quint tweeted. Startup founders scrambled to get their funds out of Silicon Valley Bank after its collapse. Andreessen Horowitz announced this week that it will continue banking with Silicon Valley Bank "for the foreseeable future" but is crafting a longer-term plan to diversify. Even so, he added, "I think we'd be supportive, as they stabilize, for them to be one of many partners that our founders bank with."

☆ SVB proves even smaller banks are too big to fail
▼ + stars: | 2023-03-15 | by ( Peter Thal Larsen | ) www.reuters.com time to read: +5 min

Yet last weekend U.S. authorities struggled to contain the fallout from the collapse of SVB Financial (SIVB.O), a relatively simple institution about half the size of the defunct Wall Street firm. After 2008, global regulators designed elaborate rules to make banks safer, and to limit the economic impact if they failed. The result was that when SVB failed, it had no additional buffer, leaving uninsured depositors potentially on the hook for losses that exceeded its capital. Five days after SVB failed, no buyer has yet come forward. It’s a timely reminder that even smaller banks can be too big to fail.

☆ SVB execs sold $84 million in stock over the past 2 years, stoking outrage over insider trading plans
▼ + stars: | 2023-03-14 | by ( Robert Frank | ) www.cnbc.com time to read: +1 min

Silicon Valley Bank CEO Greg Becker sold nearly $30 million of stock over the past two years, raising new questions over insider stock sales. Becker sold $3.6 million worth of shares on Feb. 27, just days before the bank disclosed a large loss that triggered its stock slide and collapse. The sale capped two years of stock sales by Becker that totaled $29.5 million, according to data from Smart Insider. Altogether, SVB executives and directors cashed out of $84 million worth of stock over the past two years, according to Smart Insider. The sales have sparked criticism of SVB's management — as well as the broader phenomenon of insider stock sales before major declines.

☆ Read the letter Silicon Valley Bank's new CEO sent to the bank's clients, addressing the bank's collapse and saying it's 'business as usual'
▼ + stars: | 2023-03-14 | by ( Cheryl Teh | ) www.businessinsider.com time to read: +4 min

Silicon Valley Bank imploded last week when depositors triggered a bank run, after the bank tried and failed to raise capital. The veracity of the letter, which was widely circulated online, was confirmed by Silicon Valley Bank executive Gerald Brady. Over the weekend, the FDIC transferred all deposits and substantially all assets of the former Silicon Valley Bank to a newly created, full-service FDIC-operated 'bridge bank' in an action designed to protect all depositors of Silicon Valley Bank. I know how important Silicon Valley Bank has been and continues to be to the success of its clients and the innovation ecosystem. Thank you and best regards,Tim MayopoulosCEO, Silicon Valley Bank, N.A.

☆ 'Shark Tank' star Kevin O'Leary is blaming Silicon Valley Bank's implosion on a 'negligent board of directors' with 'idiot management'
▼ + stars: | 2023-03-14 | by ( Cheryl Teh | ) www.businessinsider.com time to read: +3 min

Kevin O'Leary has blamed Silicon Valley Bank's management for the bank's implosion. Silicon Valley Bank collapsed after a bank run, and there are differing opinions on why that happened. The Federal Deposit Insurance Corporation took control of Silicon Valley Bank on Friday after a catastrophic bank run. There has been mud-slinging in all directions over the factors that may have contributed to Silicon Valley Bank's failure. Representatives for Silicon Valley Bank did not immediately respond to Insider's request for comment outside regular business hours.

☆ Elizabeth Warren says the millions in bonuses Silicon Valley Bank executives took home last year should be recovered by regulators: 'We should claw all that back'
▼ + stars: | 2023-03-14 | by ( Katherine Tangalakis-Lippert | ) www.businessinsider.com time to read: +2 min

Silicon Valley and Signature banks were shut down this week by regulators. Their chief executives made millions, but "we should claw all that back," Warren argued in an op-ed. Joseph DePaolo of Signature got $8.6 million," Warren writes, taking aim at the executives of the collapsed banks. "We should claw all of that back, along with bonuses for other executives at these banks." The collapse of Silicon Valley Bank has become the country's largest bank failure since the 2008 financial crisis.

☆ More banks could soon fail - but that could end up being good news for stocks
▼ + stars: | 2023-03-14 | by ( Phil Rosen | ) www.businessinsider.com time to read: +7 min

Still, no matter what the Consumer Price Index clocks in at, it's possible that the failures of Signature Bank and Silicon Valley Bank already convinced Jerome Powell to take his foot off the gas. Silicon Valley Bank employees react to the bank's collapse Getty Images1. With the government rescuing Signature and Silicon Valley Bank depositors, not all the downside has been contained, according to Wharton finance professor, Itamar Drechsler. Silicon Valley Bank's CEO, Greg Becker, previously asked Congress to ease regulatory oversight on the bank. But, as Jefferies analysts put it, "the world changed" with Silicon Valley Bank's failure.

☆ Warren urges Powell to recuse from SVB probe, demands answers of ex-bank CEO
▼ + stars: | 2023-03-14 | by ( Pete Schroeder | ) www.reuters.com time to read: +3 min

Senator Elizabeth Warren on Tuesday called on Federal Reserve Chair Jerome Powell to recuse himself from an internal review of recent bank failures, saying his actions "directly contributed" to them. The Federal Reserve said on Monday it is reviewing its oversight of the bank in the wake of its abrupt failure Friday. Warren argued that Powell's prior support for easing bank rules indicates he should not participate in the review. For the Fed’s inquiry to have credibility, Powell must recuse himself from this internal review," she said in a Twitter post. Reporting by Doina Chiacu and Pete Schroeder; Editing by Susan Heavey and Chizu NomiyamaOur Standards: The Thomson Reuters Trust Principles.

Silicon Valley Bank's collapse could have ramifications for the technology landscape over the coming years, analysts and investors said. Senate Majority Leader Chuck Schumer will give campaign contributions from former Silicon Valley Bank CEO Greg Becker and the bank's PAC to charities, according to a person with direct knowledge of the matter. Schumer received the maximum individual contribution of $5,800 from Becker in June 2021, according to the Federal Election Commission. The campaign received $2,700 from the bank's political action committee in 2015, per an FEC filing. Rep. Maxine Waters, D-Calif., said she will return the contribution she received from Becker, according to reporting from Politico.

Biden said his administration's actions over the weekend meant "Americans can have confidence that the banking system is safe", while also promising stiffer regulation after the biggest U.S. bank failure since the 2008 financial crisis. Shares in U.S. banking giants JP Morgan Chase (JPM.N), Morgan Stanley (MS.N) and Bank of America (BAC.N) nevertheless weakened. But your second thought is, how big was that crisis, how big were the risks that this step had to be taken?" U.S. regulators stepped in on Sunday after the collapse of SVB, which had seen a run after a big bond portfolio hit. [1/3] U.S. President Joe Biden delivers remarks on the banking crisis after the collapse of Silicon Valley Bank (SVB) and Signature Bank, in the Roosevelt Room at the White House in Washington, D.C., U.S. March 13, 2023.

[1/2] A sign for Silicon Valley Bank (SVB) headquarters is seen in Santa Clara, California, U.S. March 10, 2023. REUTERS/Nathan Frandino/File Photo/File PhotoCompanies SVB Financial Group FollowMarch 13 (Reuters) - SVB Financial Group (SIVB.O) and two top executives were sued on Monday by shareholders, who accused them of concealing how rising interest rates would leave its Silicon Valley Bank unit, which failed last week, "particularly susceptible" to a bank run. The proposed class action against SVB, Chief Executive Greg Becker and Chief Financial Officer Daniel Beck was filed in the federal court in San Jose, California. Reporting by Jonathan Stempel in New YorkOur Standards: The Thomson Reuters Trust Principles.

Greg Becker and two top lieutenants, Chief Financial Officer Daniel Beck and President Michael Descheneaux , were at the helm of Silicon Valley Bank as it rode a wave of low rates and easy-money policies. Last year, when the world changed and the Federal Reserve started raising rates at its fastest pace in decades, they all but ignored it, betting that interest rates would fall and homing in on the boom-and-bust tech industry.

☆ ‘Absolutely idiotic’. SVB insider says employees are angry with CEO
▼ + stars: | 2023-03-13 | by ( Matt Egan | ) edition.cnn.com time to read: +5 min

“That was absolutely idiotic,” the employee, who works on the asset management side of Silicon Valley Bank, told CNN in an interview. By the close of business that day, Silicon Valley Bank had a negative cash balance of about $958 million. “People are just shocked at how stupid the CEO is,” the Silicon Valley Bank insider said. “There should be no mistaking that Silicon Valley Bank’s collapse was a direct result of the Fed’s persistent and excessive interest rate hikes,” they wrote. Of course, Silicon Valley Bank had more than a year to prepare for both of those issues.

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