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Speaker 1: You said in that video that you're going to get

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Speaker 1: to the bottom of this. What's your plan. Well, I

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Speaker 1: just got off the phone with officials from Treasury and

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Speaker 1: the FDIC. I must tell you I'm very disappointed that

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Speaker 1: we're not talking about who the acquirer is and who's

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Speaker 1: going to take care of the borrowers of this bank.

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Speaker 1: The auction process of the weekend failed. During the weekend,

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Speaker 1: they actually did receive a bid. I'd i'd urge strongly

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Speaker 1: that they should take the most competitive offer and have

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Speaker 1: a bank in place today with the market open. Indeed,

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Speaker 1: they allowed they allowed the bid to fail, and they've

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Speaker 1: got now a situation where you know, they save taxpayers

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Speaker 1: are not on the hook for this, but every bank

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Speaker 1: in America is going to get an increased fee based

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Speaker 1: on the amount of the divots that has to be covered.

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Speaker 1: And last time I checked, banks in America pay taxes too.

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Speaker 1: So this is something that we've got to navigate through.

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Speaker 1: I really think that there's some serious questions here. Though

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Speaker 1: clearly Silicon Valley Bank was mismanaged. Um you know, they

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Speaker 1: had very well connected CEO who was on the board

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Speaker 1: of the San Francisco FETE. I don't think enough people

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Speaker 1: have asked, where was the San Francisco fete in terms

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Speaker 1: of its regulatory oversight? Where the regulatory agencies asleep at

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Speaker 1: the wheel? Here was it a management team that was

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Speaker 1: more focused on ESG and cashing out stock than they

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Speaker 1: were in managing the bank? Confidently, there are many many

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Speaker 1: questions to be answered here, Joe, are you using the

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Speaker 1: word bail out? Then? Well, I would say that if

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Speaker 1: you talk about who's going to bear the brunt of this,

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Speaker 1: it's it's a matter of semantics. When they say there

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Speaker 1: will be increased fees to banks throughout the system. Uh,

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Speaker 1: those banks again, we'll have to pay taxes that's coming

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Speaker 1: out of there, those fees coming out of their cost structure.

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Speaker 1: Those fees will likely be passed long to to Tennessee

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Speaker 1: and to national taxpayers. Here here point is they'll push

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Speaker 1: down those cost taxpayers end up pulling the bag anyway, right, Ols,

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Speaker 1: did you learn on that call today? Was there news?

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Speaker 1: Because boy, we've been in a news vacuum largely over

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Speaker 1: the weekend. Uh? Could there still be a deal center? Well?

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Speaker 1: When I when I spoke with FDIC officials, they said

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Speaker 1: that their intention was to put a process back together again.

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Speaker 1: And they had they had a bid. They informed me

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Speaker 1: that they did have a bid for the bank over

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Speaker 1: the weekend. They decline a bit evidently, uh, and they

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Speaker 1: want to come back and reattack this. I think it's

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Speaker 1: going to be very, very difficult, though, and I tried

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Speaker 1: to remind them that there are many many borrowers here,

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Speaker 1: are small startup firms that are now without a banking relationship.

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Speaker 1: Has any certainty, Uh, this is going to create a

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Speaker 1: knock on effect in our high tech sector. I hope

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Speaker 1: that the efforts that they're making will certainly calm the

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Speaker 1: deposit base in America. We've been very concerned about the

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Speaker 1: impact of this on regional banks, and you know, not

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Speaker 1: to not to allow this to precipitate a massive move

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Speaker 1: to to the largest banks in America for safety. I

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Speaker 1: hope that that that those communications work and that that

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Speaker 1: will sort of sort itself out. But I am still

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Speaker 1: very concerned about the situation that we left ourselves in with,

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Speaker 1: specifically with Silicon Valley Bank. It's borrowers, and the implication

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Speaker 1: is going forward, if the changes were not made to

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Speaker 1: Dodd Frank in twenty eighteen, would this still have happened? Well,

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Speaker 1: Silicon Valley Bank back in twenty nineteen was a seventy

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Speaker 1: billion dollars bank. I understand the cries that have been

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Speaker 1: lashed out here in the past couple of days, trying

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Speaker 1: to blame this on the previous administration. But nothing, and

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Speaker 1: they're talking about twenty one fifty five. Yes, nothing under

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Speaker 1: that law would have relieved the regulatory requirements on SVP.

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Speaker 1: They would not have been included in any of this. Again,

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Speaker 1: this is a distraction. Really, the question is what was

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Speaker 1: management doing and what were the regulators doing that allowed

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Speaker 1: them to miss this. You asked the Chair of the

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Speaker 1: Fed just last week, Senator about capital requirements for banks

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Speaker 1: and tailoring as some changes could be in the offing.

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Speaker 1: I realized there's not a real proposal. The Vice chair, though,

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Speaker 1: is looking at this, looking at a study, and you

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Speaker 1: were concerned about the end of tailoring. Does this change

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Speaker 1: your view on that? No, My concern right now is

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Speaker 1: just making certain regulators are looking at what they should be.

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Speaker 1: And we have a situation here where we've had a

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Speaker 1: very rapid increase in interest rates that's caused a number

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Speaker 1: of the securities that are in the quote hold to

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Speaker 1: maturity bucket in banks balance sheets to go underwater. And

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Speaker 1: what should have been happening was these banks should have

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Speaker 1: been managing their interest rate risk. Evidently Silicon Valley Bank

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Speaker 1: did not. They weren't anticipating liquidity requirements. When you have

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Speaker 1: a customer based like Silicon Valley Banks, a lot of

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Speaker 1: startup companies that are running with no revenues, that are

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Speaker 1: burning cash, those demands are bound to be high. Again,

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Speaker 1: you have mismanagement here as the culprit and a lack

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Speaker 1: of oversight in my view, As the President calls for

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Speaker 1: a new bank regulation bill, would you support any legislation,

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Speaker 1: Senator that would tighten regulations on bank specifically going back

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Speaker 1: to that twenty eighteen law. I'm certainly going to be

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Speaker 1: taking a cold hard look at all of this and

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Speaker 1: looking at it anew. I don't think any regular is perfect.

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Speaker 1: There's always room for improvement. But it is amazing to

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Speaker 1: me where you have an administration and always looks to

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Speaker 1: put more regulations as the answer to everything, when actually

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Speaker 1: it gets down to management confidence and regulatory confidence. I

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Speaker 1: think the very core of this failure. I keep hearing

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Speaker 1: ESG You mentioned it quickly, Senator. Do we know that

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Speaker 1: this bank was involved in investments that were compromised somehow

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Speaker 1: by an effort to to make ESG investors happy. What

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Speaker 1: do you know about that, Well, they're on site. They've

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Speaker 1: out a five billion dollars investment in green projects. You know,

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Speaker 1: the distraction from what's doing best for its shareholders, what's

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Speaker 1: doing best for its depositors and customers, while trying to

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Speaker 1: you know, market itself as a as a green bank,

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Speaker 1: that sort of thing. I view this as a distraction.

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Speaker 1: Bank should be focused on the core business, uh, not

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Speaker 1: on social justice and you know other areas. The depositors

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Speaker 1: and shareholders can do that with their own money. I

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Speaker 1: don't think it's up to these bank management teams to

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Speaker 1: do this, and SBB was definitely engaged in that arena.

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Speaker 1: What's your view, Senator, or the view even of the

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Speaker 1: Banking Committee on the FDIC whether FDI insurance needs to

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Speaker 1: be restructured. We've been hearing two fifty two hundred and

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Speaker 1: fifty thousand a lot lately. Should that be double? That

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Speaker 1: number has been there a long time, hasn't it, Joe?

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Speaker 1: I think the biggest question coming out of all of this,

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Speaker 1: and this is one that we've got to look at

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Speaker 1: very hard. The actions taken over the weekend suggest that

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Speaker 1: perhaps there's no such thing as an uninsured deposit in America.

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Speaker 1: Looks like you have a bank here with close to

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Speaker 1: ninety percent of its depositors or its deposits in the

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Speaker 1: uninsured category, yet they're all going to be taken care of.

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Speaker 1: So I think the American public looking at this is

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Speaker 1: going to ask some very basic questions regarding fairness. And

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Speaker 1: I think that we've put ourselves in a very challenging

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Speaker 1: environment right now. SPB different from certainly banks in Tennessee.

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Speaker 1: We don't have this percentage of uninsured deposits in my

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Speaker 1: home state, but here you had a lot of you know,

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Speaker 1: high highly wealthy, you know, you know, depositors here, different

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Speaker 1: sorts of businesses maintaining large cash balances. It is a

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Speaker 1: unique bank in many respects. But this is raised a

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Speaker 1: specter of really whether there is any such thing as

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Speaker 1: an unmatured deposit in America. Should that number be at

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Speaker 1: two hundred and fifty thousand US. It's hard to say

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Speaker 1: what the right number is right now. There's been so

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Speaker 1: much inflation in the marketplace since that number was set.

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Speaker 1: But I felt for many years that was a certainly

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Speaker 1: an adequate number for the everyday depositor. Certainly that would

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Speaker 1: be the case in my home state when you're talking

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Speaker 1: about a very different type of deposit based though the

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Speaker 1: head was SPB Clearly it's just a different animal altogether.

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Speaker 1: It's talking with Senator Bill Haggerty here on Bloomberg Radio,

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Speaker 1: serves on the Banking Committee and was briefed earlier by

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Speaker 1: the Treasury and the FDIC is another bank in a

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Speaker 1: fail Senator, is this it? Well, you know signature has

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Speaker 1: been taken over to day. Yeah. I think there's a

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Speaker 1: great deal of consternation about First Pub. Look, they stopped trading.

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Speaker 1: Understand trading is back up again on that bank. I

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Speaker 1: really hope that we'll have clear messaging coming out of

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Speaker 1: Washington today that helps calm the markets and you know,

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Speaker 1: let's depositors understand exactly what's happening here. The last thing

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Speaker 1: we need to do is see a precipitous run based

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Speaker 1: on misinformation or lack of information. So I hope we

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Speaker 1: have good communications coming out of the Treasury. I know

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Speaker 1: they're working on that. Hopefully that will help calm the markets.

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Speaker 1: But there was no doubt I spoke with Cheer Powell

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Speaker 1: last night about this Today is going to be choppy

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Speaker 1: as the market digestis information. We're certainly seeing that