The Blubber

The FDIC and the Federal Reserve are weighing creating a fund that would allow the regulators to backstop more deposits at banks that run into trouble following Silicon Valley Bank’s collapse, per Bloomberg.

Regulators discussed the new special vehicle in conversations with banking executives and hope such a measure would reassure depositors and help contain any panic, the report said.

The U.S. Federal Reserve declined to comment on the report, while FDIC did not immediately respond to a Reuters request for comment.

The CEO of Silicon Valley Bank was on the board of directors of the Federal Reserve Bank of San Francisco.

On Friday, SVB Financial Group Chief Executive Officer Greg Becker was no longer a director of the Federal Reserve Bank of San Francisco, according to a Fed spokesman.

He became a Class A director of the San Francisco Fed’s head office board in 2019.

The three Class A directors are elected by member banks and are not involved in the selection of the reserve bank’s leadership, who are appointed by the Class B and Class C directors, per Bloomberg.

Notably, a previous executive worked at Lehmans: Joseph Gentile.

He was the Chief Administrative Officer at Silicon Valley Bank.

Prior to joining the firm in 2008, he served as the CFO for Lehman Brothers’ Global Investment Bank.

Lehman Brothers' collapsed in 2007.

His bio further says: Prior to that, he served as CFO of the Global Corporate and Investment Bank at Bank of America, where he led the Capital Markets Division.  In addition he was the CFO for the Private Bank. Previously, Mr. Gentile spent more than 10 years with J.P. Morgan in various financial management positions, including Global Head of Financial Risk Management. He started his career at Arthur Andersen.

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