Lawmakers demanded details from top US banking regulators about the unexpected bankruptcies of regional lenders Silicon Valley Bank and Signature Bank during his testimony Tuesday before the Congress from that country.
Officials of the Federal Reserve, Federal Deposit Insurance Corporation (FDIC), and Department of Treasury are testifying before committees of the Congress about the rapid failure of the two banks earlier this month. The bankruptcies triggered a widespread loss of investor confidence in the banking sector.
senior officials of the Senate Banking Commission they claimed that the banks had been mismanaged, but also wanted to know how the companies ended up in such a precarious situation.
“The crime scene doesn’t start with the regulators before us. Instead, we need to look inside the bank, at the bank CEOs and (former President Donald) Trump-era bank regulators who made it their mission to give Wall Street all I wanted,” said Senator Sherrod Brownwho chairs the panel.
While lawmakers from both parties agreed that the banks were mismanaged, Republicans also reserved their anger for regulators, who they said should have identified and addressed the problems sooner. The senator Tim Scott, The panel’s top Republican, questioned giving regulators more authority after the crisis.
“The warning signs should have been flashing,” he said Scott, the top Republican on the panel. “If you can’t maintain the mission and enforce the laws as they are already on the books, how can you ask Congress for more authority with a straight face?”
Regulators have vowed to review their rules and procedures following the two bankruptcies, while insisting that the system as a whole remains sound.
In their opening speeches, those responsible for the Federal Reserve and FDIC They claimed that depositors’ funds are safe. But both affirmed that they are reviewing the causes of bank failures and the rules that must be changed to prevent this type of collapse in the future.
Critics have pointed out that both companies, but especially BLS, grew rapidly and wiped out huge amounts of uninsured deposits. According to the vice president of Federal Reserve Oversight, Michael Barrthose funds quickly fled at any hint of trouble.
The hearing is expected to be the first of several. The House Financial Services Commission will hear from the same regulators on Wednesday, and congressional leaders have already said they want to question the former chief executives of the two banks.
Source: Ambito
