Senate Banking Committee Discusses Accountability, Oversight of Financial Regulators in Tuesday Hearing
The Senate Committee on Banking, Houses, and Urban Affairs met on November 14th to conduct a hearing regarding oversight of financial regulators.
“We must turn the lessons of this year into action,” said Senator Sherrod Brown (D – OH), Chairman of the U.S. Senate Committee on Banking, Housing, and Urban Affairs. “It means improving bank supervisions, it means holding bank executives accountable for risky behavior that does in fact sometimes drive their banks into the ground.”
Witnesses included Vice Chair for Supervision at the Federal Reserve, Michael Barr, Chair of the Federal Deposit Insurance Corporation, Martin Gruenberg, Chair of the National Credit Union Administration, Todd Harper, and Acting Comptroller at the Office of the Comptroller of the Currency, Michael Hsu.
“Congress must finish the job and pass our bipartisan RECOUP Act,” Brown said, referencing the Recovering Executive Compensation Obtained from Unaccountable Practices Act (RECOUP) presented by the committee earlier this year with the aim “to hold senior bank execs accountable when they gamble with customers money.”
The Senate hearing comes nearly two weeks after FTX founder, Sam Bankman-Fried, was found guilty in Manhattan federal court on seven charges including wire fraud, conspiracy to commit securities fraud, and conspiracy to commit money laundering.
The attention surrounding Bankman-Fried’s case has put a spotlight on the lack of regulation within the crypto sphere, with Bankman-Fried using a faulty automated risk engine to algorithmically liquidate risky positions on the exchange.
In his testimony today, Federal Deposit Insurance Corporation (FDIC) Chair Martin Gruenberg made note of “unintended consequences” produced by algorithmic lending
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