Lawmakers Add Treasury Witness to Hearing on SVB, Signature Failures
The House Financial Services Committee wants to hear banking regulators’ view on the banking crisis.
Top federal banking regulators are scheduled to testify before the committee March 29 in what lawmakers indicate will be the first of many hearings on the failures of Silicon Valley Bank (SVB) and Signature Bank.
As reported by PYMNTS Sunday (March 19), the Financial Services Committee is set to hear from Martin Gruenberg, chair of board of directors at the Federal Deposit Insurance Corp. (FDIC), and Michael S. Barr, vice chair for supervisors at the Federal Reserve’s board of governors.
Now, Rep. Patrick McHenry, R-N.C., who chairs the committee, and Rep. Maxine Waters, D-Calif., its ranking Democrat, have added the Nellie Liang, the Treasury Department’s undersecretary for domestic finance, as the third federal regulator on their witness list.
“The House Financial Services Committee is committed to getting to the bottom of the failures of Silicon Valley Bank and Signature Bank,” McHenry and Waters said in a news release. “This hearing will allow us to begin to understand why and how these banks failed.”
Read more: SVB Crisis Spurs Greater Call for Bank Regulations, New Investigations
“We are working around the clock to deliver answers to the American people in order to protect depositors, promote the safety and soundness of America’s banks, and strengthen our financial system,” McHenry and Waters added. “We will conduct this hearing without fear or favor to get the answers the American people deserve.”
As PYMNTS reported previously, SVB was shut down and taken over by regulators March 10 following a run on deposits. It was the second-largest banking failure in U.S. history, and an event that continues to shake the financial world.
Two days after SVB folded, the run spread to Signature Bank, which was also shut down by regulators.
The Mid-Sized Bank Coalition (MSBC) has reportedly written to federal regulators asking that the FDIC extend insurance on all deposits for the next two years amid broader market fears and a dampening environment for smaller lenders.
Speaking at the American Bankers Association summit Tuesday (March 21) Yellen said the U.S. could take steps similar to the ones it took to shore up Signature and SVB if other smaller lenders are in danger.
The three witnesses called before the committee each lead those federal agencies at the center of the government response to the banking crisis.
Their testimony will no doubt be critical in informing Congress’s response to the bank failures.