Former Bank Executives to Testify Before Senate Committee on Bank Failures

The Banking Committee of the Senate has announced that former executives of Signature Bank and Silicon Valley Bank will testify on May 16. Greg Becker was the CEO of Silicon Valley Bank, while Scott Shay and Eric Howell were the chairman and president, respectively, of Signature Bank. Both banks collapsed recently, and the executives will finally speak publicly about the failures, which had consequences for the US financial markets. However, Senators may not ask questions that require the disclosure of confidential supervisory information.

Expected Questions and Topics

Senators on both sides of the aisle will likely ask tough questions of the executives. CNBC has previously reported on stock sales made by four top executives at SVB in the weeks and months prior to the bank’s collapse. Senators have requested that the Securities and Exchange Commission investigate the sales. In addition, the executives may face queries about why they received their annual bonuses just before the government took over the bank. There will also be questions about why Silicon Valley Bank ignored warnings from regulators about the bank’s potential collapse if interest rates rose quickly, as they did after the Federal Reserve repeatedly hiked them starting last year.

Joseph DePaolo, the former CEO of Signature Bank, received a letter from the committee requesting his attendance at the hearing, but he is not expected to appear. The hearing will take place two months after the banks collapsed, and the former executives will be grilled extensively.

In a separate hearing on May 18, the Banking Committee plans to hear from top federal bank regulators, including the Vice Chair for Supervision at the Federal Reserve, Michael Barr, and the Chairman of the Federal Deposit Insurance Corporation, Martin Gruenberg. They will also face questions about the oversight of Signature Bank, Silicon Valley Bank, and the most recent bank that failed, First Republic Bank. Additionally, the committee will hear from two state regulators who were responsible for the oversight of Signature Bank, Silicon Valley Bank, and First Republic Bank: Clothilde Hewlett, Commissioner of the California Department of Financial Protection and Innovation, and Adrienne Harris, Superintendent of the New York State Department of Financial Services.

The hearing on May 16 will be the first time that the former executives of Signature Bank and Silicon Valley Bank will testify before the Senate about the banks’ failures.