© Reuters. FILE PHOTO: U.S. Senator Elizabeth Warren (D-MA) gestures as Federal Reserve Chairman Jerome Powell testifies before a Senate Committee on Banking, Housing, and Urban Affairs hearing on the “Semi-Annual Monetary Policy Report to Congress “, on Capitol Hill in
By Kanishka Singh and Rishabh Jaiswal
WASHINGTON (Reuters) – U.S. Senator Elizabeth Warren called on Sunday for an independent investigation into the recent bankruptcies of Silicon Valley Bank and signature bank (NASDAQ:) and specifically targeted the head of the Federal Reserve Bank of San Francisco responsible for overseeing SVB.
Democrat Warren, who is pushing for tougher banking regulations, sent a letter on Sunday to the inspectors general of the US Treasury Department, the Federal Deposit Insurance Corporation (FDIC) and the Federal Reserve, urging the regulators to examine the recent management and supervision of banks that collapsed earlier this month.
California regulators closed Silicon Valley Bank on March 10 and appointed the FDIC as receiver. It was the biggest US banking collapse since Washington Mutual failed during the 2008 financial crisis. On Friday, the bank’s parent, SVB Financial Group, said it had filed for Chapter 11 bankruptcy protection.
US prosecutors are investigating the collapse of SVB, a source familiar with the matter told Reuters last week.
Warren also said on Sunday that he has no faith in San Francisco Federal Reserve President Mary Daly following the collapse of SVB.
“No, I don’t,” Warren said on CBS’s “Face the Nation” when asked if he had faith in Daly.
Financial stocks have lost billions of dollars in value since Silicon Valley Bank and Signature Bank collapsed this month. President Joe Biden said Friday that the banking crisis has calmed down. He also promised Americans that their deposits are safe.
The inspectors general of the Treasury, the Fed and the FDIC should deliver a preliminary report to Congress in 30 days, Warren said in his letter.
“Bank executives, who took unnecessary risks or failed to protect themselves against fully foreseeable threats, must be held accountable for these failures. But this mismanagement was allowed to occur due to a series of failures by lawmakers and regulators,” he wrote in the letter. letter. .
He also criticized Federal Reserve Chairman Jerome Powell in his interview with CBS.
“Remember that the Federal Reserve Bank and Jerome Powell are ultimately responsible for the oversight and supervision of these banks. And they have made it clear that they believe their job is to lighten regulations on these banks. Now we have seen the consequences,” Warren said. .
