ICYMI—Hagerty Joins The Journal Editorial Report on Fox News to Discuss Silicon Valley Bank Collapse

March 27, 2023

NEW YORK, NY—United States Senator Bill Hagerty (R-TN), a member of the Senate Banking Committee, joined The Journal Editorial Report on Fox News this weekend to discuss the collapse of Silicon Valley Bank.

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Partial Transcript

Hagerty on Federal Reserve interest rate hikes: “If you’d asked me two weeks ago when I had [Federal Reserve] Chair [Jay] Powell before me in [the Senate Banking] Committee, I would’ve said, ‘He is definitely going to raise [interest rates] 50 basis points.’ You’ve seen what’s happened with the collapse of these banks—there [are] jitters in the system for sure—but there’s also remaining considerable inflation. He’s been dealt a very tough hand. I heard my colleague, Senator [Elizabeth] Warren, talking about recklessness. But if I think about recklessness, I think about the policies of this Administration that basically waged war on the domestic oil and gas industry from the very beginning. That’s been inherently inflationary. And then, if you think about the stimulus spending that’s been pushed through without a single Republican vote, they’ve jammed through trillions of dollars of stimulus spending that, again, have made the Fed chair’s job very, very difficult. I saw him dial it back to 25 basis points. Could it have been zero? Perhaps. 25 [basis points] is still a signal, I think, that he recognizes that we’re going into tougher territory ahead.”

Hagerty on calls for more bank regulation: “I think what we saw with Silicon Valley Bank was definitely a liquidity problem, but it was not a solvency problem. Again, I look at the banking system broadly—I look at the banking system in my home state of Tennessee—and we are in good shape. Capital is in a good position. I know there are a lot of calls, you know, many in Washington never want to let a crisis go to waste, as they say, more regulation, trying to find new opportunities to put legislation in that might suit a particular political purpose. But I think what we need to step back and do is look very hard at what’s transpired most recently and make certain that the regulators are actually doing the job they’ve been given to do.”

Hagerty on the state of Tennessee banks: “We have an excellent Banking Commissioner in the state of Tennessee. He’s reached out to most all the banks in the state. We have not seen an outflow of deposits in Tennessee. That’s good news. I think the larger regional banks have good reason to be concerned because they have great clients that some of the larger G-SIBs, the ‘too-big-to-fail’ banks, might want to try to pick off. I’ve heard rumors about some of the loan officers from the larger banks trying to reach in and poach certain client accounts, but, again, these are good bankers, certainly the ones in Tennessee. I think they’re going to fight hard to keep their clients.”

Hagerty on the failure of oversight from the San Francisco Fed and Silicon Valley Bank: “I’ve been deeply concerned about the way the Treasury [Department] has dealt with the situation. I’ve been deeply concerned about the failure at the San Francisco [Federal Reserve] in terms of their regulatory oversight. They’ve not done their job, but I’d back it all the way up to management as well. If you look at what happened with Silicon Valley Bank, they were asleep at the wheel. They didn’t have the Chief Risk Officer position filled for eight months leading up to this failure. No question about [a bad decision] from a management standpoint. But then you’ve got to go to the regulators, and the San Francisco Fed was getting detailed liquidity reports on a monthly basis. They should have seen this. In fact, there were analysts in Wall Street that could see the problems with SVB, yet no one at the San Francisco Fed obviously stepped up to do something about it. […] We’re going to get to the bottom of this.”