A Senate hearing on recent bank failures turned into a prickly confrontation between bank executives and lawmakers. Former leadership for Silicon Valley, Signature, and First Republic Banks were hammered by lawmakers about why their banks collapsed. And there wasn’t a lot of agreement on the cause. Bank executives blamed the government and the media, while lawmakers blamed mismanagement and greed.   Hi, I'm Kathy Fettke and this is Real Estate News for Investors. Please remember to subscribe to this podcast and leave us a review.   Silicon Valley Bank made the biggest splash as the first bank to fall with about $210 billion in assets. Signature bank had about $110 billion when it was seized by regulators. They were the third and fourth largest banks in the U.S. so their failures raised huge concerns about the impact on the entire financial system. First Republic went south and teetered for a few months after it lost billions in deposits, and was largely taken over by JPMorgan.   SVB CEO Blamed a Series of “Unprecedented Events”   In a joint session before the Senate Banking Committee, former Silicon Valley Bank CEO Greg Becker pointed a finger at the federal government, saying the bank’s failure was the result of a series of “unprecedented events.” He testified that: “With near zero-percent interest rates and the largest government sponsored economic stimulus in history, more than $5 trillion in new deposits flooded into commercial banks. By the end of 2020, SBV had grown 63 percent over the prior year, and in 2021, SVB’s assets grew another 83 percent to $212 billion.” (1)   He also pointed out that during the pandemic, when inflation started to become an issue, the Federal Reserve insisted that inflation was “transitory” and that interest rates would remain low.   Massive Bank Run at SVB   The bank’s collapse largely happened after a decision to invest more than half of the bank’s loan portfolio into fixed-income Treasury securities, when interest rates were low. They are considered “low risk” but they are also impacted by interest rate hikes. When interest rates blew up to fight inflation, the value of SVB’s portfolio shrank and that forced the bank to sell at a $2 billion loss. When news spread about the bank’s situation, depositors became concerned about accessing their funds and the bank experienced a massive bank run.    Media Misconceptions   Becker also blamed the media for comparing the March 8th failure of Silvergate Bank to Silicon Valley Bank. He told lawmakers that the two banks had completely different business models, and said: “Rumors and misconceptions quickly spread online, culminating on March 9th with the first-ever social media bank run leading to more than $42 billion in deposits being withdrawn from SVB in 10 hours, or $1 million every second.”   Two More Dominoes to Fall   Former Signature Bank Chairman Scott Shay was miffed that his bank was seized by New York State regulators on March 12th. He insisted that the bank would have survived that bank run. He argued: “We were at all times solvent and well-capitalized, and even with the sale of our available-for-sale securities, we still would have remained well capitalized.”   Former First Republic CEO Mike Roffler also blamed social media and news stories for inciting panic among depositors along with technology that allows for fast-paced digital withdrawals. Roffler told lawmakers: “The contagion spread very quickly and panic is very hard to control.” (2)   Lawmakers Blame Mismanagement, Greed   But lawmakers also took the conversation in a different direction, criticizing bank leaders for millions of dollars in bonuses and personal stock sales ahead of the failures. Senator Sherrod Brown ripped into Becker saying: “Workers face consequences, executives ride off into the sunset. Only in corporate boardrooms can you run your business into the ground, take the whole economy along with you and come out ahead. We can’t let that happen again.”   Some lawmaker