Recorded at the Newcomer Banking Summit on March 14, 2024 in San Francisco. Read about the event here: https://www.newcomer.co/p/newcomer-ba...

Thanks to our sponsors, Jiko (https://www.jiko.com) and BCV (https://baincapitalventures.com)

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The drama of the two days last March when SVB collapsed were still vivid for many in the room. Peter Hébert of Lux Capital related how he had first heard rumblings of possible troubles at SVB in November or December of 2022, “but I brushed it off.” He never thought concerns about the impact of interest rate increases would lead to a bank run.

Laurence Tosi, founder of WestCap Group, appearing with Hébert, was harshly critical of federal regulators for not being on top of things and failing to backstop all deposits right away when SVB failed, attributing the reluctance to ignorance and politics.

Hébert said there were “three hours of sheer panic” among his portfolio companies after the FDIC takeover of SVB, and also criticized regulators. He said he’d heard that JPM was ready to take over SVB during the crisis, but the government didn’t want to see more concentration in the banking sector.

Tosi predicted: “I think the model is going to change…credit is going to get a lot tighter.”