- Scott Shay and Greg Becker criticized for their testimony in Congress
- Both executives carefully shifted the blame for the collapse of the banks to “alarmists” and regulators.
- At the same time, shortly before the collapse of the organizations, both received impressive bonuses.
On Tuesday, May 16, the Congressional Banking Services Committee held a hearing on the collapse of SVB and Signature Bank. The meeting was attended by members of the former leadership of organizations that are, well, very didn’t want take responsibility for what happened.
For example, in his testimony, the former head of Signature, Scott Shay, tried to shift the blame for the collapse of the organization to the crypto-currency sector and regulators. Allegedly, after the bankruptcy of SVB, depositors withdrew about $16 billion, which led to a “hole” in the bank’s budget.
“In your testimony, you seem to blame clients and regulators, but you do not consider yourself guilty” – Senator Cynthia Lummis.
Shay denied this statement, but he was accused of duplicity. In a brief speech by the ex-head of the bank, the term “cryptocurrency” is mentioned 10 times.
Elizabeth Warren did not stand aside either. She stated that Shay and Greg Becker (the former head of the SVB) “got millions” while their banks were failing. Senator Sherrod Brown agreed with her:
“You received bonuses just a few hours before the asset freeze by the federal authorities. Unfortunately, this is a common practice on Wall Street. While ordinary Americans are losing money, executives are running into the sunset.”
And indeed it is. We previously reported that Greg Becker fled to Hawaii instead of leading the SVB liquidation and expediting compensation.
The position of the Committee is quite clear – the reason for the collapse of the two banks lies in the miscalculations of the leadership. They did not take into account the risks and ignored the recommendations of the federal authorities, which caused the collapse.