Cointelegraph By Turner Wright
Representatives from the Federal Deposit Insurance Corporation and Federal Reserve will be testifying before the United States House Financial Services Commission in a newly announced hearing investigating the collapse of two major banks.
In a March 17 notice, Representatives Maxine Waters and Patrick McHenry — ranking member and chair of the committee, respectively — said U.S. lawmakers would listen to testimony from federal financial regulators “in response to the failures of Silicon Valley Bank and Signature Bank” in a March 29 hearing. FDIC chair Martin Gruenberg and Fed vice chair for supervision Michael Barr are expected to appear before Congress.
“The House Financial Services Committee is committed to getting to the bottom of the failures of Silicon Valley Bank and Signature Bank,” said Waters and McHenry. “This hearing will allow us to begin to understand why and how these banks failed.”
#NEW: Chairman @PatrickMcHenry and Ranking Member @RepMaxineWaters announce a bipartisan hearing with federal financial regulators in response to the failures of #SVB and Signature Bank to be held on March 29, 2023.
Read the full release https://t.co/UFEpzBzJLX pic.twitter.com/0cqWkHE2K3
— Financial Services GOP (@FinancialCmte) March 17, 2023
On March 10, Silicon Valley Bank shuttered following a bank run among major depositors, but the government stepped in to announce most uninsured depositors — those with more than $250,000 — would be covered. In contrast, reports suggested Signature Bank had no issues with solvency at the time of its closure on March 12, but New York regulators stepped in, giving the FDIC control of the firm’s insurance process.
Barr will be releasing a report on the Fed’s supervision and regulation of Silicon Valley Bank. The Department of Justice and Securities and Exchange Commission have also reportedly announced their own probes into some of the bank’s executives selling stock in the weeks leading up to the closure.
Related: US lawmaker suggests Signature’s collapse was tied to instability of crypto
Some lawmakers have pointed to exposure to crypto firms as potential culprits in the downfall of the banks, while advocates in the space have argued that government officials were looking to “de-bank” crypto and blockchain companies. According to the House Financial Services Committee, it expects to hold multiple hearings on the issue.