There were plenty of people in the room on Tuesday during the Senate hearing about bank failures who agreed that former SVB CEO Greg Becker was to blame for SVB's failures, but Becker sure did not seem to be one of them.
More from Fortune: 5 side hustles where you may earn over $20,000 per year—all while working from home Looking to make extra cash? This CD has a 5.15% APY right now Buying a house? Here's how much to save This is how much money you need to earn annually to comfortably buy a $600,000 home
Bipartisan fire was directed at Becker and two executives from Signature bank as senators questioned the executives about their decision making leading up to the bank runs in mid-March. Becker reiterated that he believed there was a unique amalgamation of factors including rising interest rates and media attention on the bank. Becker, when asked, didn’t pinpoint any specific decision he would make differently looking back.
On March 9, $42 billion in deposits were withdrawn in a single day from SVB after it became clear that the bank had suffered huge unrealized losses in its loan portfolio due to rising interest rates. Becker argued that the bank run was the central root cause of the bank’s failure. "I do not believe that any bank could survive a bank run of that velocity and magnitude," Becker said.
During the two hour hearing, Becker explained that he partially blamed the media for its coverage of SVB and said that a herd mentality set off a bank fun that ultimately led to the bank's demise. "Silvergate’s failure and the link to SVB caused rumors and misconceptions to spread quickly online, leading to the start of what would become an unprecedented bank run,” Becker explained.
Yet the senators pushed him to acknowledge that executive mismanagement was a factor in SVB's failure. "It's hard to believe a 30 year bank executive and CEO for 12 years should have needed a roadmap from the regulators to define the obvious problems that needed to be fixed and weren't," said Sen. Sherrod Brown of Ohio, who is the chairman of the Senate banking Committee. In response to questions about why SVB lacked a chief risk officer in the eight months before the bank run, Becker argued that they were in the midst of a search for a qualified candidate. He acknowledged that regulators had pointed out flaws in SVB's balance sheet, but said that he was in the process of working with regulators when the bank run happened. “[I] strongly believe that the leadership team and I made the best decisions we could with the facts, forecasts and outside expert advice available to us at the time,” he explained. “I believe we were responsive to the regulator's feedback," he added.
Becker was also put on the hot seat regarding executive compensation. He earned nearly $10 million in 2022, although he explained it was part of a compensation package that would have been paid out over a few years, and added that much of his compensation was held in stock that was wiped out. Sen. John Kennedy of Louisiana accused Becker of neglecting to reorganize its loan portfolio to adjust for rising interest rates because it would have lowered Becker’s bonus. Becker denied these claims, arguing his compensation package was long term. Multiple senators asked Becker if he was keeping his $1.5 million bonus he received in 2022, to which he said he would comply with regulators if they seized the bonus. Becker denied that he acted on non-public information when he cashed out some of his stock options in the weeks before SVB fell.
Senators seized on the sentiment that similar to the 2008 financial crisis, big banks were bailed out while working class Americans bore the brunt of executives failures. In a tense exchange. Sen. Raphael Warnock of Georgia asked Becker if he considered “ordinary folks” when conducting his business at the bank. “They don't they don't have the high class problem of $10 million over a few years, did you consider them when you were making your decisions?” Warnock asked.
While Becker said he took responsibility for the bank's failures, senators were clearly frustrated that he could not point to a fatal wrong decision on his own part. Senators brought up a trip to Hawaii Becker took after the bank run and Sen. John Fetterman asked Becker whether he thinks the same policies that apply to working class Americans should apply to him. "Shouldn’t you have a working requirement after we bail out your bank? Republicans seem to be more preoccupied with SNAP requirements for hungry people than protecting taxpayers that have to bail out these banks," Fetterman said at the end of the hearing, to which Becker did not reply.
This story was originally featured on Fortune.com
More from Fortune: 5 side hustles where you may earn over $20,000 per year—all while working from homeLooking to make extra cash? This CD has a 5.15% APY right nowBuying a house? Here's how much to saveThis is how much money you need to earn annually to comfortably buy a $600,000 homeClick Here To Get Funded!