He says the underlying causes are “Hubris, entitlement” and “greed”, saying executive pay at SVB was tied to growth at the bank.īrown also lashes the venture capitalists who fuelled Silicon Valley Bank’s growth by telling their clients to keep their money at SVB, only to then fuel this month’s bank run by telling them to take their money out, causing more chaos and panic. The committee must consider how banks such as SVB and Signature Bank “exploded in size”.

“The scene of the crime” does not start with the regulators who will testify today, Brown adds, pointing the finger instead at mismanaged banks and an industry that lobbied for looser regulations during the Trump administration. Once again, small businesses and workers feared they would pay the price for others’ bad decisions. The Senate Committee on Banking, Housing and Urban Affairs has begun a hearing into SVB.Ĭommittee chair, senator Sherrod Brown, says the collapse of SVB left its customers worried that they not be able to pay their staff, due to venture capitalists “panicking on Twitter” and fuelling the bank run at the bank. Over in Washington, policymakers are also probing the collapse of Silicon Valley Bank. He insisted that the UK would not follow Switzerland’s move, of wiping out holders of AT1 bonds before shareholders (as occurred in the Credit Suisse rescue).

He said that there had been several offers for SVB UK during the weekend after its parent company collapsed, but that it took until 4am on Monday 13th to know that a sale to HSBC would go ahead – that’s just three hours before it was announced.īailey said that recent market turmoil, such as last Friday’s wobble, was a sign that the global markets are testing “quite a lot” of the banking sector, rather than in response to specific problems. “We’ll keep a close eye on bank funding costs, what the consequences of those could be for households and businesses, equally looking out for other risk factors, we have to remain incredibly vigilant.”īailey insisted, though, that the UK banking sector was in a strong position, despite the turmoil in the sector. 00:58 Silicon Valley was fastest bank collapse in nearly 30 years, says Bank of England governor – videoĭeputy BoE Governor Dave Ramsden agreed on the need for vigilance, saying:

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