Source: United States Senator for South Dakota Mike Rounds
WASHINGTON – U.S. Senator Mike Rounds (R-S.D.), a member of the Senate Committee on Banking, Housing, and Urban Affairs, today questioned Gregory Becker, the former CEO of Silicon Valley Bank (SVB). The collapse of SVB was the second-largest bank failure in U.S. history and the largest since the 2007-2008 financial crisis.
“In November of 2022, the Federal Reserve issued an MRA, Matter Requiring Attention, for SVB’s interest rate risk. The supervisory findings stated that the firm’s interest rate risk simulations were unreliable and gave a false a sense of safety in a rising rate environment and masked the need to take actions earlier in the rate cycle. Examiner requiring corrective action by June 30 of 2023,” Rounds said.
Rounds asked, “I’m just curious, the fact that they’d identified the deficiencies, they gave you an MRIA, and then an MRA, but they didn’t expect you to respond until 2023. Did that somehow suggest that they were relaxing their concerns? Is that the way that the bank saw this when they received this additional follow up from the regulators?”
Becker responded, “Senator, I can’t speak on behalf of the Federal Reserve on what they were thinking…”
“Well, I’m asking what you thought when you received it,” Rounds quipped.
“…That was certainly my experience that we were responsive to, whether it was an MRA or MRIA, we treated them the same and moved quickly to remediate them as fast as we possibly could,” Becker answered.
“I think the 30-some outstanding at the time would probably suggest differently,” responded Rounds.
Click HERE to listen to Rounds’ remarks.
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