SVB former CEO ties collapse to rumors, Fed Reserve’s interest rate hike

2023-5-16 15:00

Silicon Valley Bank former CEO Greg Becker blamed the bank’s failure on an unprecedented bank run following rumors about the bank and the Federal Reserve’s interest rate hikes.

In a May 16 testimony before the US Senate Banking Committee, the former bank executive claimed that social media fueled the bank run — adding that no financial institution could survive a similar situation.

Ex-SVB CEO blames Fed Reserves interest hikes

Becker pointed fingers at last year’s Federal Reserve’s interest rate hike. He described the interest hike as “the steepest rate increase over a 12-month period in almost 40 years.”

The bank chief added that the financial regulator’s “messaging” of “transitory” inflation lured the bank into investing its securities portfolios in the “low-yield environment created by the Federal Reserve.”

While admitting the high rate affected the value of some of SVB’s securities portfolio, he claimed that the bank still had government-backed securities and could have borrowed against them.

“The increase in interest rates resulted in a decline in the fair value of SVB’s securities portfolio—which was disclosed in our securities filings—those government-backed securities remained safe, and we expected that SVB could borrow against them.”

Rumors, misconceptions fuelled bank run

However, he noted that the rumors and misconceptions surfacing online that compared SVB to Silvergate Bank — including a Financial Times article — triggered the bank’s collapse.

“SVB had been compared to Silvergate in a Financial Times article published on February 21, which provided negative commentary regarding Silvergate and SVB’s securities portfolios. 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.”

According to his testimony, the bank customers withdrew $42 billion in deposits within 10 hours on March 9, and another $100 billion in deposits were requested to be withdrawn on March 10. Becker said this accounts for about 80% of the bank’s deposits.

“I do not believe that any bank could survive a bank run of that velocity and magnitude, which was ‘far beyond historical precedents.”

Meanwhile, Becker’s claims contradict those of the authorities. According to the regulators, SVB failed because of its mismanagement by the leadership team, the failure of Feds supervisors to address issues on time, and regulatory changes from the past administration.

The post SVB former CEO ties collapse to rumors, Fed Reserve’s interest rate hike appeared first on CryptoSlate.

Similar to Notcoin - Blum - Airdrops In 2024

origin »

Time New Bank (TNB) íà Currencies.ru

$ 0 (+0.00%)
Îáúåì 24H $0
Èçìåíåèÿ 24h: 0.00 %, 7d: 0.01 %
Cåãîäíÿ L: $0 - H: $0
Êàïèòàëèçàöèÿ $0 Rank 99999
Öåíà â ÷àñ íîâîñòè $ 0.0020147 (-100%)

bank former reserve rate rumors interest ceo

bank former → Ðåçóëüòàòîâ: 126


Ex-China Central Bank Governor Talks About Upcoming Digital Yuan and Its Benefits

The current president of the Chinese Finance Association, Zhou Xiaochuan, has recently talked about the upcoming digital yuan. According to the economist, who has worked as the former head of the People’s Bank of China, the country’s central bank, China will continue on its path to create a digital yuan to be used for both […]

2019-11-27 00:51


Ex-ECB Chief is “Strongly Against Bitcoin,” Says Cryptocurrencies are “Not Real”

Jean-Claude Trichet, the former president of the European Central Bank is not a fan of cryptocurrencies and is doubtful that they could ever become the future of money. “I am strongly against bitcoin, and I think we are a little complacent,” said Trichet during a panel discussion at Caixin’s 10th annual conference in Beijing on […]

2019-11-11 04:58


Ôîòî:

Swell 2019: Dr. Raghuram Rajan on Enabling Financial Inclusion with Blockchain and Digital Assets

Dr. Raghuram Rajan, former Governor of the Reserve Bank of India and Distinguished Professor of Finance at the University of Chicago, took the stage at Swell 2019 and underscored the important role that technology, including blockchain and digital assets, plays in fueling economic growth, increasing financial inclusion and ultimately revolutionizing businesses in emerging markets around … Continued The post Swell 2019: Dr.

2019-11-7 11:20


Ôîòî:

ECB President: ’We Should Be Happier to Have a Job Than to Have Our Savings Protected’

Newly installed European Central Bank President Christine Lagarde made controversial remarks in a recent statement prior to assuming her new role. The former IMF Managing Director implored: “isn’t it true that ultimately we have done the right thing to act in favour of jobs and of growth rather than the protection of savers?” Regarding former […] The post ECB President: ’We Should Be Happier to Have a Job Than to Have Our Savings Protected’ appeared first on Bitcoin News.

2019-11-1 10:13


Ôîòî:

Bank of Ireland staff asked to testify in $300M OneCoin fraud case

As the multi-billion dollar OneCoin cryptocurrency pyramid scheme continues to tumble, news of witnesses set to testify against the scam’s perpetrators are now coming to light. According to Finance Feeds, employees of the Bank of Ireland have been asked to testify in the case against Mark Scott, one of the alleged figureheads of the $3 billion-plus OneCoin scam.

2019-9-30 17:30


Former Senior Federal Reserve Official: US Dollar is Best Reserve Currency, Not Libra

Talk around the regulation of Facebook’s Libra stable coin is intensifies as the potentially mega disruptive digital asset aims to launch in 2020. Earlier in August, the Governor of the Bank of England, Mark Carney, proposed the development of digital currencies as a suitable replacement of the US Dollar. The adoption of digital assets provides […]

2019-9-26 18:36