Republican Sen. Rick Scott and Democrat Elizabeth Warren blamed the bankruptcies of both banks on regulatory failures by the US central bank, which has so far operated with an internal inspector general who reports to the Fed’s board.
A conservative Republican senator and a progressive Democrat from the United States will introduce a bill on Wednesday to replace the internal inspector of the Federal Reserve with another appointed by the president, to strengthen banking supervision after the bankruptcies of Silicon Valley Bank and Signature Bank and the financial crisis unleashed from its collapse.
Republican Senator Rick Scott and Democrat Elizabeth Warren blamed the failure of both banks on the US central bank regulatory rulingswhich so far has worked with a Internal inspector general who reports to the Fed board.
“Our legislation fixes that. establishing an inspector general at the Fed appointed by the president and confirmed by the Senatejust like any other large government agency,” Scott said in a joint statement with Warren.
Warren said this month’s banking disruptions “have highlighted the urgent need for a truly independent inspector general so that Federal Reserve officials be held accountable for any lapses or irregularities“.
The Federal Reserve was not immediately available for comment as it will set its interest rate update later this afternoon.
The legislation would be introduced late on Wednesday. According to the four page text, the Fed’s inspector general would be replaced by an independent one that would oversee the Federal Reserve and the Bureau of Consumer Financial Protectionwhich within the central bank is in charge of consumer protection in the financial sector.
The Fed Rate Update this afternoon becomes relevant after the financial collapse unleashed two weeks ago. While from some banks they pointed against the monetary agency due to the level of virulence of the updating of interest rates, while on the other hand the easing of some financial controls is criticized, as in the case of stress tests for regional banks , which facilitated the bankruptcy of Silicon Valley Bank after a run broke out against it.
Source: Ambito
