Is titled concern continued oversight on Regional Bank failures. Without objection, all members will have five legislative days to submit extraneous materials to the chair for inclusion in the record. Without objection, the chair is authorized to declare a recess of the committee at any time. With that, i now recognize myself for four minutes. Todays hearing will help the Financial Services committee learn more about recent Bank Failures, including management missteps, supervisory failures, and rapid fire bank runs in the age of social media. I think our witnesses for testifying today. The recent banking crisis was fueled by failed Bank Management, lack of hedges against Interest Rate risks, failed military policy, failed supervision, and overspending by the administration and democrats that led to historic inflation, prompting increased Monetary Policy action. Today, we will hear about what went wrong from the Bank Management themselves in state regulators. This is important, as the committee is still waiting to get information from federal regulators about what happened. Information has been provided to the Government Accountability office, but has not found its way from federal regulators in treasury to this committee. Instead, individuals at the fed, fdic, in state regulators all the states do their own self assessments of the recent bank and supervisory failures, and hastily put out public facing narratives before independent assessments can be made. Todays hearing will help fill in some of the gaps that remain, given the lack of transparency and accountability from federal regulators. To improve matters, i put forward five bills increase transparency and accountability a federal regulators in their actions, especially when emergency measures are employed. We are not here to defend management movements that failed or to put anyone on trial for prosecution. And looking at the recent Bank Failures in the continued turbulence in our Banking System, it is important to acknowledge that the Bank Failures did not occur in a macroeconomic vacuum. We have seen runaway inflation that was fueled by reckless, nearly two trillion dollar American Rescue plan in march of 2021, one personal saving economy what was already an astounding 5. 7 trillion dollars. Inflation continues to hammer american families, and the Federal Reserve was late to respond. Because the Federal Reserve failed to tighten Monetary Policy in a timely manner, Interest Rates were boosted at the fastest pace in modern history. That rapid Monetary Policy shock injected increase Interest Rate risks into the economy in general, and banks and Balance Sheets in particular. Federal regulators and supervisors were again late and responding. They relate even realize the rapidly growing Interest Rate risk called for increased supervisory vigilance and prompt corrective attention to banks that face the largest risks. Reading the hasty review of the regulators, things that failed at mismanage risks or inattentive to Risk Management gaps that supervisors and examiners have identified, and sometimes were not adequately responsible or timely in taking necessary mediations. According to their narratives, regulars face staffing issues and maybe couldve been more forceful and working to get timely or remediations. Its impossibly important issues are brushed aside by the regulators reviews. Prior to the big players, they have been years of work from home in virtual rather than in person Bank Examinations because of covid restrictions. That fact, however, received only a few sentences in the federal report on svb, identifying only the quote, covid19 examination a search of the fdic review of Signature Bank for the word covid provides one instance. It seems that such a factor many others Glasgow Village reviews deserve more scrutiny. Hastily produce reviews by regulators or native for public release around the same date calls into question the extent to which narrative setting, rather than establishment of actual facts, was the motive for the reviews in public reports. Those reviews were led by individuals from the fdic and fed and not for the full boards, so that they provide only one limited side of the story. I welcome the views information that we will hear today, especially considering the lack of transparency and accountability from our federal regulators. And i recognize the chairman, or rather, the Ranking Member of the subcommittee on financial to shunts airy policy. The gentleman from illinois, mr. Foster, for five minutes. Thank you mister chair, thank you to our witnesses for appearing here. My career in congress and on this committee began in march of 2008, which was an interesting time to be a new member of the Financial Services committee. We spent my first three years on this committee. First, dealing with the emergence and response to the financial crisis. Secondly, to identify the that were broken in the parts which werent. And deciding what needed to be prepared, and thirdly, to deal with the regulatory response, the doddfrank bill that basically into a couple months ago, had a pretty good record for vending largescale Bank Failures and financial crises. The financial crises that we are dealing with here is orders of magnitude than what we dealt with here. We should keep that clearly in mind. But when the machine breaks, we have to identify whether broke due to a design flaw or manufacturing flaw. That all the parts work as designed . Or was it simply subject to unanticipated conditions that are outside of its designed specifications and warranty . And so that is a lot of what this hearing is about. We have in front of us some of the key components in trying to keep a bank from failing, we want to understand a little bit more about the details of what happened there. Ha and so we also have to look at the changes that have been made externally to the Banking System. Having to do with the presence of the internet and communication, and if people are terrified now about the speed at which banking rants can happen, imagine will happen in a few years where everyone is using their chatgpt money manager, which will be programed to pull your money out the moment a banking man is detecting our system, how much capital and liquidity do you have to hold against that sort of environment . And so the environment is changing. But our first appears that we have to understand that if everyone played the roles as appropriate to the rules that are in place as a few months ago and the previous couple years, and i look forward to this hearing. Thank, you i yield back. Gentlemen i now recognize the chairman of the oversight committee, mr. Huizenga for four minutes. Thank you mr. Barr, chairman barr i should say, and im glad that we were able to proceed with this joint subcommittee. I think that this is important work that we do as we, on these very subcommittees, dig into the details and find out what are some of the most challenging issues that we have experienced economically here in the last couple of years. And i do want to say thank you to the witnesses for being here, because this hearing from you is vital. It is vital, as this committee continues its investigation into the recent failures of both Silicon Valley bank and First Republic bank. And in testimony today, we are going to hear, i imagine, some try to pin these Bank Failures solely on bank mismanagement. Some will try to pin it slowly on failed supervision. Some on president runs on deposits field by social media. I think that the reality is, and everybody up here realizes, that it is a combination of all three of those things. Coupled with high Interest Rates, years of easy money, as the chairman was highlighting, and stimulus field consumer spending, this administration and the fed overheated our economy and then relate to pump the brakes, or to borrow the punchbowl analogy from alan greenspan, no one had the courage to take the punchbowl away from the party. And so im sure some of my colleagues already let you off the hook and maybe try to change the narrative. It should not be understated that the management of each of your banks is questionable at best. You are not at managing both short and long term risks. You quoted deposits from risky businesses. Took untenable financial risks, and ultimately failed to respond to rising Interest Rates. And mr. Becker, you relationship with the San Francisco fed should be scrutinized. At the time is a failure, svb had 31 open supervisory failures or warnings from regulators, and yet nothing was done. It is not gonna notice that your position on the feds board of directors potentially created a relationship that impeded supervisors judgment and created some of that leniency. And for their part, the Federal Reserve missed or ignored all of the signs. And when they did react, it was too late. Yesterday, in testimony before a committee, the vice chairman of supervision, mr. Barr, the other mr. Barr, at the Federal Reserve admitted that we what we have all known for months. The failure of your banks was a result of failed supervision under his watch. He finally admitted that you had the responsibility of that. However, federal regulators will attempt to use these Bank Failures techs are size more and more authority well outside of the bounce that congress established for them, and the notion that these failures were a result of regulatory changes is unfounded, as we heard from the g. A. O. , their reports about the fed started in 1991, not 20 1 55. It was 1991. Nevertheless, regulators will try to shift the blame, but the facts are clear. And in testimony before our own Committee Last week, the geo flag those concerns and supervision enforcement practices, going back to 1991, report concludes that all three federal financial regulators have quote, why discretion choosing from among Enforcement Actions of varying severity, close quote. Lastly, an independent assessment of these events is not only appropriate, but its desperately needed. This committee is committed to providing the american taxpayer with an unfiltered review of the events that preceded these bank collapses and ultimately they bear the cost of your failures. I look forward to hearing from each of you as we continue to seek these answers, and mister chairman, i yield back the balance of my time. The gentleman yields back, i now recognize the jeweler from texas, the Ranking Member the oversight and investigations have committee mr. Green for five minutes. Thank you mister chairman. Mister chairman, holding this oversight hearing today with the former chief executives of Silicon Valley bank and Signature Bank will allow important questions to be asked, and answers to be received from those who purchased the root cause of the banks collapse. And yesterdays hearing, regulators acknowledge their shortcomings. Todays preeminent question is, will todays bankers acknowledge their fault . Will they take responsibility for the more than 70 uninsured deposits that alarmed depositors. Well they acknowledged both Silicon Valley bank and Signature Bank experienced outsized growth between 2018 2022 . And that Signature Banker from approximately 47 billion in total assets in 20 18 to 110 billion in 2022. That Silicon ValleyBank Increased from 56 billion to 209 billion over that same period of time. Will they admit that this outsized gross is in assets was filled by more than 70 uninsured deposits at both banks. For higher than the medium of 32 for conquerable banks. Will they confess that the executives of both banks knew or should have known that their Risk Management practices had to be strengthened appropriately as they grew in size exponentially. Will they concede that it was irresponsible for Silicon Valley bank to operate without a chief risk officer from april until december 2022. Will they agree that those who nurtured the root cause of a base collapse, should return any bonuses receive as a collapse came to fruition. Will they allow and a vow that upon Silicon Valley bank having received 13 of the most serious supervisory warnings that the fed is issued, the banks officer should have taken corrective action. And will they come clean about Signature Banks failure to take corrective action after having received nine matters requiring border tension notices from the federal deposit insurance corporation, including three specifically relate to liquidity or Risk Management. Mister chairman, the time for atonement and recompense is at hand. Today provides us the opportunity to hear from those who had a hands on experience with the failure of these banks. These persons were capable, confident, and qualified. They all have degrees indicating such, and they have experience keynoting such. They should have taken corrective action. They will be given the opportunity to answer these questions that i have called to the attention of not only this committee, but also of this country. The people of america need to know what happened at these banks. This is a time for us to find out. I yield back the balance of my time. The gentleman yields back. And i recognize the gentleman from north carolina. The chairman of the full committee on Financial Services. Mr. Mchenry for two minutes. I wanna thank chairman barr in the right numbers as well. The days hearing will hear three different stories from three different banks. The Business Models were not the same. Youre depositors one of the same. The degree of mismanagement was not the same in the midst of this crisis. The truth is, each of you bears responsibility as captains of your respective ships, and weve heard that for me. There is a storm brewing, and you failed to batten down the hatches. And while inflation raged, the fed in the biden ministration told us it was transitory. Nothing to worry about. But we will get into the management question shortly, but one of the mistakes though is that these three bankers actually believed the bureaucrats. We all know inflation was not transitory, and after being late to respond, that was forced to raise rates at the fastest pace in modern history. And again, failed to properly prepare for this inflationary and high Interest Rate environment. Silicon valley bank was the projectile that set this volatility into motion. The Biden Administration used another word to describe svb. Idiosyncratic. Well clearly, three of you today, three of the 30 largest banks in american history, in america today, and the problem goes much deeper. The subsequent failures of signature in First Republic coupled with the volatility and Regional Bank stocks sent shockwaves their Financial System. The fear of contagion has rocked an already shaky economy. Its a well hear from each of you today, in new york in california think regulators as well. I think its important to take a step back and really examine the undercurrents the cause this crisis. The economic mismanagement by the Biden Administration, he quit the perfect storm that each of you failed to write your ship in. I yield back. The gentleman yields back. Today we welcome this testimony of mr. Greg becker, former ceo of Silicon Valley bank. Mr. Scott shea, cofounder of Signature Bank, and mr. Michael roffler, ceo of First Republic bank. We take all of you all for being here, you will all be recognized for five minutes to give an oral presentation of testimony but without a objection, all of your written statement will be made part of the record. Mr. Becker, you are now recognized for five minutes. Huizenga, Ranking Members green and foster, and member of the subcommittee. Thank you for the opportunity to appear before you today. My name is greg becker, and i was that ceo of Silicon Valley bank. Im here today to answer your questions about what happened at svb to the best of my memory. At the outset, i want to be clear that i never envisioned myself or svb being in this situation. I was employee for svb for nearly 30 years and ceo for the last 12 years until it was taken over by the fdic. I believed in the bank and its mission and care deeply about art more than 8000 employees an