Silicon Valley Bank—which is under federal government control after becoming the second-largest bank failure in U.S. history last week—has a new CEO, Tim Mayopoulos.
Mayopoulos, who has other crisis experience, says that business will carry on as usual while he works to unwind the bank’s assets.
The Federal Deposit Insurance Corporation (FDIC) was quick to intervene on Friday after Silicon Valley Bank faced a bank run in the face of mounting concerns over its cash flow and assets that had declined in value.
On Monday, Mayopoulos–
The businessman brings decades of legal and financial leadership experience, notably his time as president and CEO of Fannie Mae, a government-sponsored company that buys and guarantees home loans. He led Fannie Mae at a time when it was still recovering from the 2008 financial crisis.
Mayopoulos has acted fast to tackle the challenge at Silicon Valley Bank, reaching out to the bank’s clients with a letter of reassurance on his first day.
“I look forward to getting to know the clients of Silicon Valley Bank,” he wrote Monday. “I come to this role with humility. I also come to this role with experience in these kinds of situations.”
Here’s what to know.
More from TIME
Who is Tim Mayopoulos?
Mayopoulos attended Cornell University in his undergraduate years where he studied English until 1980, before he graduated from New York University School of Law in 1984. Mayopoulos has said that he comes from a humble background and that he attended Cornell with a generous financial aid package, which opened new opportunities for him.
He began his career after law school by clerking for a U.S. district court judge. Mayopoulos then worked at a law firm, and from 1994 to 1996 he served on the federal Whitewater investigation into Bill and Hillary Clinton’s real estate dealings. In the 2000s, Mayopoulos held senior roles at Deutsche Bank and Credit Suisses before serving as Bank of America’s general counsel for five years. He was dismissed from the position after the economic recession in 2009 after Bank of America acquired Merril Lynch.
Mayopoulous joined Fannie Mae months later as general counsel, vice president and corporate secretary. In 2012, he took over as the company’s President and CEO, positions he kept for the next six years.
Under his tenure, Fannie Mae recovered from the recession and implemented new technology to bring more safety and transparency to mortgage lending. He moved on in 2019 to serve as president at Blend, a cloud-based software company that processes mortgages and consumer banking.
After the FDIC took control of Silicon Valley Bank last week, the agency tapped Mayopoulos to be the company’s new CEO. Right as he took up the role, Mayopoulos assured clients that the lender would continue “conducting business as usual.”
“We are here to serve you,” he wrote in a letter to clients. “I recognize the past few days have been an extremely challenging time for our clients and our employees, and we are grateful for the support of the amazing community we serve.”
In the letter, Mayopoulos explained that the FDIC transferred all assets held by Silicon Valley Bank to an FDIC-operated “bridge bank” called, “Silicon Valley Bank, N.A.,” where depositors have full access to their money and both existing and new deposits are protected.
The Federal Reserve and government announced on Sunday that even customers with deposits over the $250,000 FDIC insurance limit would have full access to their funds.
The former CEO
Before Mayopoulos stepped in, Silicon Valley Bank had been led by Becker since 2011. The FDIC announced that Becker had been ousted from the role on Friday.
The trouble really kicked off on March 8 when the bank made a surprise announcement that it was attempting to raise cash through a sale of stock, and that it had sold $21 billion in assets at a $1.8 billion loss in an attempt to keep up with withdrawals in deposits.
In a letter to clients March 8, Becker urged them not to pull funds out of the bank, saying that Silicon Valley Bank could weather the pressure. But, he admitted that customer deposits had come in lower than forecast last month. On March 9, amid immense panic, customers had attempted to pull $42 billion out of Silicon Valley Bank, and its parent company—SVB Financial—saw a 60% drop in stock price. By the end of the day, Silicon Valley Bank had a negative cash balance around $958 million.
On March 10, the FDIC closed the bank and took it over.
Becker has been heavily criticized for selling $3.6 million in Silicon Valley Bank stock less than two weeks before the collapse. The sale was part of a stock sale plan that was filed in January.
Silicon Valley Bank clients and employees have since blamed Becker in large part for spreading panic that led to the bank’s collapse. Becker has reportedly apologized to employees.
“It’s with an incredibly heavy heart that I’m here to deliver this message,” Becker said in a video to staff on Friday, according to Reuters. “I can’t imagine what was going through your head and wondering, you know, about your job, your future.”
