Federal Reserve rate hikes and online rumors and misconceptions contributed to the collapse of Silicon Valley Bank.

So said former Silicon Valley Bank CEO Gregory W. Becker in written testimony prepared for the Senate Committee on Banking, Housing and Urban Affairs and posted on the committee’s website Monday.

Becker said in his testimony that in August 2022 the Federal Reserve’s supervisory team gave the bank the second highest rating on liquidity, capital and market risk, and that by the end of 2022, Silicon Valley Bank’s key capital ratios were similar to or higher than those of its peers.

The Federal Reserve’s series of interest rate hikes – which became the steepest over a 12-month period in almost 40 years – resulted in a decline in the fair market value of Silicon Valley Bank’s securities portfolio, according to the testimony.

Although the two banks were very different – with Silvergate being nearly 100% crypto-focused while Silicon Valley Bank had only about 3% of its deposits from clients in that sector – an earlier media report had compared the two institutions, the testimony said.

Becker’s written testimony was prepared for the Senate committee’s hearing, “Examining the Failures of Silicon Valley Bank and Signature Bank,” which will be held Tuesday.

As PYMNTS reported March 15, the collapse of two banks and one self-liquidation over a period of just five days led to calls for both a tightening of banking regulations and investigations into the executives at the helm of the failed institutions.

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