Representatives of the Federal Deposit Insurance Corporation and the Federal Reserve will testify before the Committee on Financial Services of the US House of Representatives in a newly announced hearing investigating the failure of two large banks.
In a March 17 notification, Reps. Maxine Waters and Rep. Patrick McHenry, the committee’s ranking member and chair, respectively, said U.S. lawmakers would hear testimony from federal financial regulators “in response to the Silicon Valley bankruptcies.” Bank and Signature Bank” at a hearing to be held on March 29. FDIC Chairman Martin Gruenberg and Fed Vice President for Supervision Michael Barr are expected to appear before Congress.
“The House Financial Services Committee has vowed to get to the bottom of the Silicon Valley Bank and Signature Bank bankruptcies,” Waters and McHenry said. “This hearing will allow us to begin to understand why and how these banks failed.”
#NEW: Chairman @PatrickMcHenry and Ranking Member @RepMaxineWaters announce a bipartisan hearing with federal financial regulators in response to the failures of #SVB and Signature Bank to be held on March 29, 2023.
Read the full release https://t.co/UFEpzBzJLX pic.twitter.com/0cqWkHE2K3
— Financial Services GOP (@FinancialCmte) March 17, 2023
On March 10, Silicon Valley Bank closed after a run on banks by large depositors, but the government stepped in to announce that most uninsured depositors—those with more than $250,000—would be covered. On the contrary, the reports suggested that Signature Bank had no solvency problems at the time of its closing on March 12, But New York regulators stepped in, giving the FDIC control of the company’s underwriting process.
barrel will publish a report on the supervision and regulation of Silicon Valley Bank by the Federal Reserve. The Justice Department and the Securities and Exchange Commission have also announced their own investigations into the sale of shares by some bank executives in the weeks leading up to the closing.
Some lawmakers have pointed to exposure to cryptocurrency companies as a possible culprit in the bank bust, while industry advocates have argued that government officials they were trying to exclude cryptocurrency and blockchain companies from the banking system. According to the House Committee on Financial Services, it expects to hold multiple hearings on the issue.
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