Lawmakers are set to grill federal banking regulators this morning in the first congressional hearing on the collapse of Silicon Valley Bank (SVB) and Signature Bank.
The Senate’s banking committee will be the first to question officials on federal oversight of SVB, which was taken over by the federal government earlier this month after a severe bank run depleted its reserve. The collapse of the bank – the biggest bank failure since the 2008 financial crisis – has sparked wider fears about the soundness of the banking sector.
Three financial regulators will appear in front of the committee: the Federal Reserve vice-chair for supervision, Michael Barr, the Federal Deposit Insurance Corporation (FDIC) chair, Martin Gruenberg, and the treasury’s undersecretary for domestic financing Nellie Liang. The trio will represent the departments and agencies that are responsible for banking regulation and have worked to reinsure the bank’s deposit and prevent contagion in the banking industry.
The regulators are expected to face tough questioning from the Senate’s banking committee which includes Democrats and Republicans who have very different theories on the bank’s collapse and what should happen in its aftermath.
Democrats, such as Senator Elizabeth Warren, who was a key creator of financial regulations after the 2008 recession, have argued that federal regulators lost oversight powers for midsize banks like SVB during the Trump administration when those regulations were rolled back.
Republicans have also criticized federal regulators, who they said failed in their oversight of the bank. But they have also criticized SVB’s culture and blamed its failure on being a “woke” bank that was too concerned with climate change, equality and
Read more on theguardian.com