Republican members of the US Senate Banking Committee sent a letter to Federal Reserve Board of Governors Chair Jerome Powell and San Francisco Federal Reserve Bank CEO Mary Daly requesting info on their supervision of Silicon Valley Bank (SVB) ahead of its collapse earlier this month
WASHINGTON (Pakistan Point News / Sputnik - 24th March, 2023) Republican members of the US Senate Banking Committee sent a letter to Federal Reserve Board of Governors Chair Jerome Powell and San Francisco Federal Reserve Bank CEO Mary Daly requesting info on their supervision of Silicon Valley Bank (SVB) ahead of its collapse earlier this month.
"We write to request more information from the Federal Reserve System... regarding the recent failure of SVB and the failure of the Federal Reserve to properly respond to apparent bank mismanagement, lack of risk controls, and other warning signs at SVB prior to its collapse," the letter, released on Friday, said.
On March 10, US regulators seized SVB, marking the largest bank collapse since the 2008 financial crisis and the second largest implosion in the country's history.
The lawmakers in the letter also said based on publicly available information SVB suffered from "rampant mismanagement," resulting in its collapse. The Federal Reserve's apparent failure to regulate SVB is even more concerning, the letter said.
Several areas of concern, the letter added, should have been readily apparent to the Federal Reserve in the months and years leading up to SVB's failure.
"Rather than effectively directing SVB management to take definitive, corrective action, it is apparent that the Federal Reserve supervisors and examiners neglected to intervene in a meaningful, appropriate way to rectify the bank's deficiencies, ensure safe and sound operations, and prevent its ultimate failure," the letter said.
Lawmakers requested the Federal Reserve officials provide all reports, supervisory determinations and risk identification records on SVB going back to January 2019, according to the letter. The committee is also seeking records on communications between Federal Reserve employees and US media outlets in recent weeks.
The committee requested the officials provide the information no later than April 6.
The letter was signed by Ranking Member Tim Scott and other Republican members of the committee, including Senators Mike Crapo, John Kennedy and Steve Daines.
Republican members of the committee also released a statement on Friday vowing to deliver transparency and accountability on the recent bank collapses. The effort will continue on Tuesday, March 28, when the panel will hold a hearing on the federal regulatory response to the situation.
Federal Reserve System Board of Governors Vice Chairman for Supervision Michael Barr is scheduled to testify to the committee alongside Federal Deposit Insurance Corporation Chairman Martin Gruenberg and Treasury Undersecretary for Domestic Finance Nellie Liang.
