The former bosses of two US banks, which collapsed in March, triggering global concerns about the state of the financial industry, assert that the failures resulted from “unprecedented” circumstances. They have a scheduled hearing in Washington on Tuesday, during which they will provide prepared testimony.
As they discuss the measures that could have been taken to prevent it, lawmakers are closely examining the incident.
Congress expects Greg Becker, the former chief of Silicon Valley Bank (SVB), to testify and state that he “never imagined” such events during the hearing.
In his prepared remarks, he blames the bank’s downfall on social media rumours and mixed messages about borrowing costs from the US central bank.
“I never imagined that these unprecedented events could happen to SVB and 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 says.
“The takeover of SVB has been personally and professionally devastating, and I am truly sorry for how this has impacted SVB’s employees, clients, and shareholders.”
Mr Becker’s first public statements
The comments represent Mr. Becker’s first public statements since regulators took over SVB in March. Following the bank’s announcement about the need to raise funds, concerned customers swiftly withdrew tens of billions of dollars within hours, raising apprehensions about the safety of their funds.
The sudden failure of the firm, then America’s 16th largest lender, was a shock to the industry.
Many other lenders felt the impact of plunging share prices, while firms considered potentially risky witnessed the transfer of billions of dollars out.
Regulators in the US ultimately seized two other mid-size banks Signature Bank and First Republic hit by the concerns. In Europe, the turmoil sparked the forced takeover of troubled Swiss giant Credit Suisse.
The episode continues to unsettle financial markets and has sparked debate in the US about financial regulation and whether authorities took proper action.