The House Financial Services Committee is demanding answers on how regulators failed in their oversight of Silicon Valley Bank and Signature Bank.
Chair of the Committee, Patrick McHenry, has been joined by the Ranking Member of the Senate Committee on Banking, Tim Scott, are requesting information from the Federal Reserve and the Federal Deposit Insurance Corporation (FDIC) regarding their regulatory activities with respect to the two collapsed banks for the two years leading up to the failure of these banks.
McHenry and Scott are also requesting that the Federal Reserve and FDIC preserve all records, future and existing, related to this matter.
The elected officials stated:
“Our oversight responsibilities to the American people require that we evaluate the root causes of these bank failures as well as the failures of U.S. regulatory agencies to prevent these collapses from occurring. These responsibilities include obtaining full information about what appears to be glaring bank mismanagement, fundamental lack of prudence in bank risk and balance sheet management, and regulators’ lack of basic supervision and enforcement of safety and soundness rules, regulations, and principles.”
The US Federal Reserve has already announced a review as to why monitors did not act before the banks’ demise. Financial regulators have access to detailed information at chartered banks and would have seen the emerging issue pertaining to long-duration assets dropping in value months ago.
