Sen. Kennedy Rakes Silicon Valley Bank CEO Over the Coals in Brutal Questioning

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Silicon Valley Bank’s failure in March 2008 was the biggest bank failure since the global financial crises of 2008. The Federal Reserve raised interest rates to combat Bidenflation, but they failed to hedge against the risks of higher rates. People then withdrew their money from the bank.

As the Senate looked into the issues surrounding bank failures, I had written earlier about the Senate Banking Committee’s hearing on Tuesday. Sen. John Fetterman was incoherent with his comments. The brilliant Sen. John Kennedy, who was the opposite of the struggling Fetterman (who should retire to Pennsylvania and recover as much of his health as possible), had no trouble saying what he thought in an expert grilling.

Silicon Valley Bank CEO Greg Becker testified before the Committee. He didn’t take full responsibility for his failure. He blamed everyone and everything but himself. Kennedy slammed him for making “stupid” decisions and failing to take into account the risks.

Kennedy noted that the value of bank interests dropped dramatically when the Fed increased interest rates. Kennedy asked, “You didn’t hedge, did you?” with the look of a parent who knows their child broke the plate but doesn’t want them to admit it.

Becker tried pretending that was not his area of expertise at the company, but he is the CEO. Kennedy said, “You are the CEO and ….you have 55 percent of assets in government bond and you don’t even know whether or not you hedged?”

Kennedy replied that he was able to answer the question and he is not even the CEO. Kennedy told him that buying hedges would have “cut into your profits” and was the reason they did not do it. Becker was unable to avoid the fact that they did cost money.

“Mr. Becker, did you make a stupid bet that ended badly? Kennedy ripped into him, saying, “And the taxpayers in America had to pay for your stupidity. Didn’t they?” Becker tried to backtrack, claiming that it was because of a series “of unprecedented events.”

He was indeed stupid if he did not understand the implications of Bidenflation, namely that rates would likely be raised, and that there could be other consequences. He is supposed to be CEO.

Kennedy didn’t allow him to get away with it.

Kennedy, slamming Kennedy, said “No, it wasn’t an unprecedented event.” This was a deep, down to the marrow stupidity.

He added: “You put your eggs all in one basket, and unless you lived on the International Space Station you could see interest rates rising.”

This article explains the reasons for bank failures in detail. We shouldn’t be forced to cover for this foolishness. It was impossible to predict? All of us could have predicted that rates would increase.