Crooked banks have been taking advantage of their customers for far too long, and the recent collapse of Silicon Valley Bank (SVB) is a perfect example.
At a recent Senate Banking Committee hearing, Louisiana Senator John Kennedy confronted former SVB CEO Greg Becker about his decision-making which led to the bank’s failure. Kennedy asked Becker if he had made a “really stupid bet” and whether taxpayers had to pick up the tab for his “stupidity”.
Becker attempted to explain the bank’s collapse as the result of events that he could not have foreseen. Kennedy disagreed, saying that it was just “bone-deep, down to the marrow, stupid”. He pointed out that Becker had not purchased any hedges, as that would have cut into his profits. As it stands, Becker had sold $3.6 million in company stock before the bank failed in March.
It’s clear that the executives at SVB were more interested in short-term gains than long-term health of the company. It is unacceptable that taxpayers had to pick up the tab for the bank’s failure due to the recklessness of its leadership.
We have seen this pattern in the past and continue to see it today. Banks are only looking to make a quick buck, often at the expense of their customers. It’s time for regulators and lawmakers to start holding banks accountable for their actions. We need stringent regulations that will ensure that banks are playing by the rules and not taking advantage of their customers.
It’s also essential that we have better oversight of executive pay and ensure that they aren’t being rewarded for short-term gains instead of long-term health. Executive pay should be tied to performance metrics that will ensure the health and stability of the bank.
At the end of the day, it’s up to regulators and lawmakers to ensure that banks are held to high standards and can’t take advantage of their customers. We need to start holding banks accountable for their actions and make sure that taxpayers aren’t footing the bill for corporate recklessness.