When regulators who took control of Silicon Valley Bank on Friday needed to quickly find someone to run the remaining businesses, they turned to Tim Mayopoulos, an attorney who had guided several banking and financial technology companies through tough times.
Mr. Mayopoulous was General Counsel at Bank of America during the 2008 financial crisis. He left the bank in December and later became chief executive officer of Fannie Mae, the government-controlled mortgage insurer. In 2019, he became President of Blend, a tech startup that provides cloud computing services to banks. He also helped untangle a mess at an online lending platform, Lending Club, by joining the board weeks after the chief executive was fired.
“He’s cool as a cucumber,” said Brian Brooks, an attorney who has worked with Mr. Mayopoulos throughout his career, including as general counsel to Fannie when Mr. Mayopoulos was the managing director.
“During all the crazy things that happened, going through the financial crisis at Bank of America, he was the guy whose demeanor never changed,” said Mr. Brooks.
Many believe Mr Mayopoulos’ connections to venture capitalists will help him handle any necessary cleanup within the bank known as the Silicon Valley Bridge Bank, which was formed when the Federal Deposit Insurance Corporation took control of Silicon Valley Bank . But he may not keep the job for long — most likely only until the FDIC can sell or liquidate all or a portion of him. Regulators are still in talks with interested buyers.
The Sinking of the Silicon Valley Bank
One of the most prominent lenders in the world of tech startups collapsed on March 10, forcing the US government to step in.
Mr. Mayopoulos will have to run the bank’s operations, including its custodial functions, while sifting through the remnants of the failed company, looking for investments and loans that still have value, all under the watchful eye of an FDIC-appointed board of directors
“At this point, he just has to run the normal operations of the bank until it’s clear what’s going to happen with it,” said Roberto Robatto, an assistant professor of finance at the University of Wisconsin-Madison School of Business.
“He’ll probably have to make very conservative decisions if problems arise,” Mr Robatto said. “He has to try to minimize the risks going forward and make sure the value of what’s left is protected.”
The collapse of Silicon Valley Bank, which was worth almost $209 billion at the end of last year, is the second largest bank failure in US history and the largest since Washington Mutual imploded amid the 2008 financial crisis.
The case of Silicon Valley Bank is similar to another bank that went bust in 2008: IndyMac Bank, which was under FDIC control for nine months from July 2008 to March 2009 when a group of investors bought it and transformed it into OneWest Bank. Mr. Mayopoulos will most likely try to keep Silicon Valley Bank’s businesses in good shape to attract buyers, no matter how long a sale takes.
An FDIC spokesman said Mr. Mayopoulos’ name was on a list created back in 2017 of “senior financial services professionals” who might be called upon if the agency needed to acquire a bank and replace its management team.
Mr. Mayopoulos’ experience with technology start-ups and venture capital investments began in 2016 when he was CEO of Fannie Mae; That year, he joined the board of directors of Lending Club after its founder was caught lying to the company’s board of directors and was forced out of the company.
Mr. Mayopoulos gained a deep understanding of the world of venture capital when he became President of Blend, said Hans Morris, a managing partner at venture capital firm Nyca Partners and chairman of the Lending Club.
“He connects these three worlds — the political world, the financial world, and the venture ecosystem,” said Mr. Morris. “He’s very good at sorting a complex set of variables and facts and different interests into a solution.”
