Representatives from the Federal Deposit Insurance Corporation and the Federal Reserve will testify before the US House of Representatives Financial Services Commission at a recently announced hearing into the collapse of two major banks.
In a March 17 notice, Representatives Maxine Waters and Patrick McHenry — a senior member and chair of the committee, respectively — said U.S. lawmakers would heed the testimony of federal financial regulators “in response to the failures of Silicon Valley Bank and Signature Bank” in a March 29 hearing. FDIC Chairman Martin Grunberg and Fed Vice Chairman for Oversight Michael Barr are expected to appear before Congress.
“The House Financial Services Committee is seeking to understand why Silicon Valley Bank and Signature Bank failed,” Waters and McHenry said in a statement. “This hearing will allow us to begin to understand why and how these banks failed.”
On March 10, Silicon Valley Bank closed after large depositors pulled funds from the bank, but the government stepped in to announce that the majority of uninsured depositors — those with more than $250,000 — would be insured. In contrast, reports suggested that Signature Bank had no solvency issues at the close on March 12, but New York regulators stepped in, giving the FDIC control of the firm’s insurance process.
Barr is to publish a report on Fed oversight and regulation of the Silicon Valley bank. The Justice Department and the Securities and Exchange Commission also reportedly announced their own investigations into some of the bank’s executives who sold shares in the weeks leading up to the closing.
Related: US Lawmaker Suggests Signature’s Crash Was Linked To Cryptocurrency Volatility
Some legislators have pointed to the impact of crypto firms as potential culprits in bank failures, while proponents in the space have argued that government officials sought to “debankrupt” crypto and blockchain companies. According to the House Financial Services Committee, it expects to hold several hearings on the issue.