After Banks Stock Routed, NYC Finance Gala Projects A Positive Outlook

After the government's backstop, Virtu's Vincent Viola was honored at the Museum of American Finance's gala.

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Taking the Museum of American Finance gala and making it a normal social event is a credit to the US government.

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As the throes of bank runs and failures swirled around the 525 guests gathered Monday night at Cipriani 42nd Street, it seemed as if they were clutching their bellinis with a sense of relief that regulators had promised to safeguard deposits exceeding $250,000 despite the uncertainty of the financial system.

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Perhaps fatigue was to blame. After working, or thinking about, the fate of the financial system for days, some indicated they needed a break.

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Vincent Viola, the co-founder and chief executive officer of Virtu Financial, said in an interview that he felt a sense of "positive calm" about the course of events. It was "an opportunity for the FDIC to get a better understanding of its role within a society in which business basically happens at the speed of light," he said, adding that the FDIC was prepared for such a situation. 

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As Mark Shenkman accepted the John Whitehead award for public service and financial leadership, he recounted some of the events he has experienced over the course of a five-decade career on Wall Street, which has included stints at Lehman Brothers and running his own firm since 1985.

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There was a long list of problems that occurred between 1975 and 1980. Some examples were fixed-income commissions ending in 1975, double-digit inflation in the early '80s, the S&L crisis in 1990, the dot com bubble, watching the end of easy, free money in 2022, and now dealing with the ripple effects of Silicon Valley Bank's and Signature Bank's financial crises..”

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He clarified in an interview that the Federal Reserve and the Federal Deposit Insurance Corporation contained the problem. "I assume confidence has been restored for the time being. However, there is still the possibility that the regional banks could be put under some pressure. I do believe that it is not going to be a severe problem since the Fed stepped in so soon after the crisis broke out."

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It is the museum's mission to educate the public about the financial history and financial literacy, and for more than a decade, it has been located on Wall Street, placing it ahead of the pandemic in terms of its location. There is currently a search for a new location for the company.

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Richard Sylla, an economist formerly at NYU who has been a trustee of the museum for more than a decade, is a historical expert who can help put the government's intervention into historical perspective if the SVB collapse is the subject of an exhibition.

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“The same thing was done by Alexander Hamilton in 1792,” said Sylla, referring to Hamilton’s maneuvers during the panic of that year during which he was in power.

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Finally, it came down to a punchline about the crisis that was the most effective for the room.

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“The goal of the gala is to surpass the $1.6 million record set last year,” said co-emcee Bob Pisani. “I have it on very good authority that the Federal Reserve will backstop the entire event if we don't make it. That's right, the Museum of American Finance has been designated a systemically important institution." 

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