Senator Elizabeth Warren (D-Massachusetts) calls on the Treasury Department, Federal Deposit Insurance Corporation (FDIC), and the Inspector General of the Federal Reserve to investigate failures of Silicon Valley Bank (SVB) and signatory banks. I’m here.
Warren also insisted the investigation be independent of Federal Reserve Chairman Jerome Powell, who issued a joint statement last week from the Federal Reserve, Treasury Department and FDIC. cites a New York Times report that it blocked an attempt to include language about regulatory failures in
“Bank executives who take unnecessary risks or fail to hedge against fully foreseeable threats must be held accountable for these failures. It was allowed to happen because of a series of failures by regulators.” In a letter dated March 18, Warren wrote: to the inspector.
Warren writes: [should] It must be completely independent and immune from the bank executives and regulators responsible for the actions that led to these bank failures. bank failure.
She said she had already asked Powell to withdraw himself from the Federal Reserve’s internal investigation into the bank’s failure, but he had not yet complied.
“This silence is troubling and, like last week’s report, because authorities have attempted to develop plans to respond to it. [Silicon Valley Bank’s] Chairman Powell has silenced regulators from publicly addressing regulatory failures that occurred under his oversight,” she wrote.
Warren denounces the bipartisan bill that passed Congress and was signed into law by then-President Trump in 2018. The bill would give banks with less than $250 billion in assets the discretion to stress test them. was given to the Fed.
She said the repeal of the Dodd-Frank Wall Street Reform Act “allowed banks like SVB and Signature to circumvent major rules and regulations,” but the Federal Reserve under the Powell administration also “We have initiated the withdrawal of major restrictions,” it said.
“And bank supervisors, especially the San Francisco Federal Reserve Bank, which oversaw the SVB, overlooked or ignored important signals about impending bankruptcy. It created an environment where I couldn’t get away from it,” she writes.
Warren writes that Powell “has a long record of failures” involving regulatory and supervisory issues related to Silicon Valley Banks and Signature Banks, and if true, blocks statements admitting regulatory failures. If so, it would be an ‘outrageous and inappropriate’ intervention.
She asked the inspector general to submit a complete, unedited preliminary report and recommendations to Congress within 30 days.
Senate Majority Leader Chuck Schumer (DN.Y.) said last week that “we need to thoroughly investigate what went wrong and hold those responsible accountable.”
Some lawmakers were outraged to learn that former Silicon Valley Banks Financial Group CEO Greg Becker was on the board of the San Francisco Federal Reserve Bank until the SVB collapsed.
Senator Bernie Sanders (I-Vt.) Saturday called Becker’s dual role a “ridiculous” conflict of interest.
“One of the most ridiculous aspects of the Silicon Valley bank failure is that its CEO was on the board of the San Francisco Federal Reserve Bank, the same organization responsible for regulating banks. I will introduce legislation to end this conflict of interest by banning me from sitting on the board of directors,” he tweeted.
The New York Times reported Sunday that the Federal Reserve has repeatedly warned Silicon Valley banks of serious risk management problems, but the banks have failed to adequately address the problems.
In a letter to Becker last week, Warren said he received $9.9 million in compensation last year, including a $1.5 million cash bonus, just hours before federal regulators bought Silicon Valley Bank. Said I paid.
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