{"id":1932429,"date":"2023-05-17T08:11:44","date_gmt":"2023-05-17T12:11:44","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/executives-behind-failed-banks-tell-lawmakers-why-the-companies-collapsed\/"},"modified":"2023-05-17T08:15:28","modified_gmt":"2023-05-17T12:15:28","slug":"executives-behind-failed-banks-tell-lawmakers-why-the-companies-collapsed","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/executives-behind-failed-banks-tell-lawmakers-why-the-companies-collapsed\/","title":{"rendered":"Failed bank executives explain collapse to lawmakers."},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"&quot;\"><div class=\"counts mashsbcount\">14<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Fexecutives-behind-failed-banks-tell-lawmakers-why-the-companies-collapsed%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1932429&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><h2>Former Bank Executives Blame Depositor Panic for Bank Failures<\/h2>\n<p>Former executives from Silicon Valley Bank and Signature Bank testified before the Senate on Tuesday, claiming that their institutions failed due to panic from depositors. The implosion of Silicon Valley Bank, where most account balances exceeded the FDIC-insured threshold, prompted the government-backed company to secure insured and uninsured accounts in early March to <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/lawmakers-made-massive-stock-trades-amid-failure-of-multiple-banks\/\" title=\"Lawmakers Made Massive Stock Trades Amid Failure Of Multiple Banks\">prevent additional bank runs<\/a>. Signature Bank collapsed days later, while other regional financial institutions continued to struggle. <\/p>\n<h3>What Went Wrong?<\/h3>\n<p>Former Silicon Valley Bank CEO Greg Becker claimed that the firm was \u201cadequately capitalized\u201d before the sale of a portfolio that had diminished in value due to Federal Reserve actions to increase the <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/steve-forbes-reveals-the-key-tool-officials-are-not-wielding-against-inflation\/\" title=\"Steve Forbes Reveals The Key Tool Officials Are Not Wielding Against Inflation\">target federal funds rate<\/a>, which in <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/executives-behind-failed-banks-tell-lawmakers-why-the-companies-collapsed\/\" title=\"Failed bank executives explain collapse to lawmakers.\">turn raised interest rates<\/a> across the economy. He added that withdrawals started as Silvergate Bank, a company that served cryptocurrency users, decided to \u201cvoluntarily wind down and liquidate,\u201d inducing fears among Silicon Valley Bank depositors. However, the Federal Reserve published a report last month that concluded that the implosion of the bank was a \u201ctextbook case of mismanagement\u201d as senior leadership \u201cfailed to <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/federal-reserve-releases-review-detailing-why-silicon-valley-bank-collapsed\/\" title=\"Federal Reserve Releases Review Detailing Why Silicon Valley Bank Collapsed\">manage basic interest rate<\/a> and liquidity risk\u201d and board members \u201cfailed to oversee senior leadership and hold them accountable.\u201d<\/p>\n<p>Former Signature Bank President Eric Howell insisted to lawmakers that his firm was \u201cwell-capitalized, solvent, and had sufficient borrowing capacity\u201d before the FDIC seized control of the company. Former Signature Bank Chairman Scott Shay added that the volatility in the cryptocurrency sector likewise translated to panic among the company\u2019s depositors and prompted the rapid withdrawals despite a \u201csolid plan to continue in operation.\u201d<\/p>\n<h3>Lawmakers Respond<\/h3>\n<p>Lawmakers referenced the analysis from the Federal Reserve as they contended that Becker and the other executives should return their executive compensation. Sen. Elizabeth Warren (D-MA) said she filed legislation that would confiscate payment from executives who \u201cblow up their banks,\u201d while Sen. Tim Scott (R-SC) noted that Silicon Valley Bank had several open risk management positions at the time of the company\u2019s failure, asserting that managers were \u201cmore focused on chasing profitability than stability.\u201d<\/p>\n<p>President Joe Biden previously said that members of Congress should increase federal authority to \u201chold senior management accountable when their banks fail\u201d or enter into the control of regulators. Current law allows the FDIC to prohibit bank executives from receiving new positions at other banks if they engage in \u201cwillful or continuing disregard for the safety and soundness\u201d of their institution; administration officials called on lawmakers to \u201cstrengthen this tool by lowering the legal standard for imposing this prohibition,\u201d as well as expand authorization for the FDIC to collect fines \u201cwhen their actions contribute to the failure of their firms.\u201d<\/p>\n<h3>What\u2019s Next?<\/h3>\n<p>Other regional banks, such as PacWest and Western Alliance, have witnessed significant turmoil in the stock market and increased withdrawal levels in recent weeks. Nearly half of Americans are presently concerned about the security of their bank deposits, according to a recent survey from Gallup, even as the FDIC will continue backing small accounts.<\/p>\n<p>Stay informed with the latest news by downloading the Daily Wire app.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Former executives of Silicon Valley Bank and Signature Bank testified to the Senate that their institutions collapsed due to depositor panic. Silicon Valley Bank&#8217;s failure, where most accounts exceeded the FDIC&#8217;s $250,000 threshold, led to government intervention.<\/p>\n","protected":false},"author":99,"featured_media":1932430,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","fifu_image_alt":"","footnotes":""},"categories":[541],"tags":[5373,7385,4363,5197,5886,3673],"class_list":["post-1932429","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-the-daily-wire","tag-bank","tag-collapse","tag-executives","tag-explain","tag-failed","tag-lawmakers"],"fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1932429","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/99"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=1932429"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1932429\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/1932430"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=1932429"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=1932429"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=1932429"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}