"No bank could have survived a bank run of such speed and magnitude," says the former director general of the institution in a text submitted on the eve of his hearing before a parliamentary committee in the United States.

This is the first time he has spoken publicly since the authorities took control of SVB on 10 March.

According to him, the US central bank (Fed) first put SVB in trouble by abruptly raising interest rates from 2022, to fight inflation.

This mechanically lowered the value of the many treasury bills that the bank had purchased as low-risk investments.

When SVB announced on March 8 its intention to sell part of its portfolio of financial securities and raise capital, the idea was to "strengthen the bank's capital position and reposition the portfolio for new market conditions," Becker said.

But on the same evening, a bank strongly linked to the cryptocurrency sector, Silvergate, announced its liquidation. However, an article had earlier compared the two institutions, even if only 3% of SVB deposits came from the world of digital currencies.

"The fall of Silvergate and the connection to SVB caused rumors and misconceptions to spread rapidly online, leading to the start of what would become an unprecedented bank run," Becker said.

The next day, the bank's customers withdrew $42 billion in ten hours.

Two days later, demands for the withdrawal of about $100 billion more were filed, prompting the authorities to intervene and take control of SVB.

The biggest bank run before, the one that brought down Washington Mutual in 2008, saw the withdrawal of $19 billion in sixteen days, according to the Fed.

In the wake of SVB's setbacks, another bank largely focused on the cryptocurrency sector, Signature Bank, was quickly affected by massive withdrawals and was seized on March 12 by the authorities.

Two former Signature Bank executives are also scheduled to testify Tuesday before the parliamentary committee.

In a text published Monday, its co-founder Scott Shay ensures that his establishment was "well capitalized" and "solvent". "I thought the bank was well positioned to weather the storm but regulators clearly saw things differently," he wrote.

© 2023 AFP