The former heads of Silicon Valley Bank, Signature Bank and First Republic Bank all blamed social media for fueling panic that led to bank runs on their institutions.
Becker told a Senate panel on Tuesday that due in part to rumors and misconceptions on social media, SVB experiencedIn his written testimony, he noted that "By the end of the day on March 9, $42 billion in deposits were withdrawn from SVB in 10 hours, or roughly $1 million every second," adding, "I do not believe any bank could survive a bank run of that velocity and magnitude.
Greg Becker, former chief executive officer of Silicon Valley Bank, arrives during a Senate Banking, Housing, and Urban Affairs Committee hearing in Washington, DC, on May 16, 2023.Shay, who also co-founded Signature, recalled how in the hours leading up to the bank's seizure, "I remember talking to depositors who were so panicked." He likened the situation to what he experienced while on Wall Street in 1987, and said it was "flooding through social media.
Scott Shay, co-founder and former chairman of Signature Bank, testifies during a hearing on"Continued Oversight Over Regional Bank Failures" in the Rayburn House office building on Capitol Hill in Washington, D.C. on May 17, 2023. "People were saying they didn't want to hear about solvency or that the bank was solvent. They didn't want to hear about $29 billion of liquidity. They didn't want to hear about rating agencies, ratings," Shay continued. "They don't want to hear about anything, they just… had to get their money to a too-big-to-fail bank, and they needed to do it immediately."
Michael Roffler, former chief executive officer of First Republic Bank, during a House Financial Services Committee hearing in Washington, D.C., on May 17, 2023.
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