Federal Regulators Testify on Bank Failures
Rebeca Moen Mar 19, 2023 09:20
Representatives from the Federal Deposit Insurance Corporation (FDIC) and Federal Reserve will testify before the United States House Financial Services Commission in a hearing investigating the collapse of Silicon Valley Bank and Signature Bank. Lawmakers are seeking to understand why and how these banks failed. The hearing is expected to take place on March 29, and both the FDIC chair and the Fed Vice Chair for Supervision will appear before Congress.
Representatives from the Federal Deposit Insurance Corporation (FDIC) and the Federal Reserve will provide testimony about the failure of two major banks, Silicon Valley Bank and Signature Bank, at an upcoming hearing that has just been announced by the United States House Financial Services Commission. Legislators are attempting to comprehend the factors that contributed to the failure of these institutions. The hearing is set to take place on March 29, and it will contain evidence from the head of the FDIC as well as the vice chair of supervision for the Fed.
The Silicon Valley Bank was forced to close its doors on March 10 as a result of a run on the bank by its large depositors. The majority of uninsured depositors who had more over $250,000 were covered by the government once they stepped in. On the other hand, it was claimed that Signature Bank did not have any problems with its solvency at the time of its closure on March 12. The FDIC was nonetheless given responsibility of the firm's insurance procedure by New York's regulatory authorities.
A report on the supervision and regulation of Silicon Valley Bank by the Federal Reserve is going to be published soon by Michael Barr of the Federal Reserve. According to recent reports, the Department of Justice and the Securities and Exchange Commission have both opened investigations into allegations that some officials at the bank sold shares in the weeks running up to the institution's shutdown.
Some MPs have indicated that exposure to crypto businesses may have played a part in the failure of the banks, while supporters in the industry have maintained that government officials were attempting to “de-bank” crypto and blockchain enterprises. The House Committee on Financial Services has indicated that it plans to conduct additional hearings about this matter.
It is important to note that Silicon Valley Bank is not connected in any way to Silicon Valley Bank Group, also known as SVB Financial Group. SVB Financial Group is a publicly listed firm that specializes in providing financial services to enterprises in the technology and life science industries. On the other hand, Signature Bank is a commercial bank that provides an extensive range of services and is principally active in the state of New York.
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