The Rising Influence of Rising Affluence

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SVB Chief Pressed Lawmakers To Weaken Bank Risk Regs

Collapsed bank’s president told Congress “enhanced prudential standards” should be lifted “given the low risk profile of our activities.”

https://www.levernews.com/svb-chief-pressed-lawmakers-to-weaken-bank-risk-regs/

In 2015, SVB President Greg Becker appeared before a Senate panel to push legislators to exempt more banks — including his own — from new regulations passed in the wake of the 2008 financial crisis. Despite warnings from some senators, Becker’s lobbying effort was ultimately successful.

Touting “SVB’s deep understanding of the markets it serves, our strong risk management practices,” Becker argued that his bank would soon reach $50 billion in assets, which under the law would trigger “enhanced prudential standards,” including more stringent regulations, stress tests, and capital requirements for his and other similarly sized banks.

The bank reportedly did not have a chief risk officer in the months leading up to the collapse, while more than 90 percent of its deposits were not insured.