Senator Elizabeth Warren, an outspoken critic of the regulatory rollbacks bank executives have lobbied for, was fired up in questioning the former heads of Silicon Valley Bank and Signature on Tuesday.
Warren accused the bank representatives of failing to pay attention to warnings from regulators and instead taking on more risk and boosting their own paychecks.
In 2019, “the same year you got a $10 million paycheck,” she said to former SVB CEO Greg Becker, “the Fed had warned of 17 unresolved supervisory issues,” including “a litany” of management failures.
Noting that the collapse of SVB cost the FDIC fund $20 billion, Warren pressed Becker in a heated exchange on how much of his own compensation he was planning to return to the FDIC.
Becker: “Senator, I promise to cooperate with regulators as they do a review —”
Warren: “Are you planning to return a single nickel to what you cost the fund?”
Becker: “Senator, I know there’s going to be a process review of compensation —”
Warren: “I’ll take that as a no.”
The senator repeated her line of questioning with Signature Bank’s co-founder and former chairman, Scott Shay, who began to reply that he believed Signature was “a responsibly managed bank.” Warren quickly interjected: “Well, I’m sorry, your opinion on what is a responsibly managed bank is now laughable.”
Asked how much of his salary he planned to return, Shay replied that he’s not planning to return any.
Summing up, Warren said: “Right now the law says that people like Mr. Becker and Mr. Shay can come to Washington, they can lobby for weaker bank regulations, they can load up their banks with risk, they can pay themselves tens of millions of dollars…and when the banks blow up, Mr. Becker and Mr. Shay get to keep all the money. And that is just plain wrong.”
