Republicans on the Senate Banking Committee are seeking answers from the Federal Reserve Board of Governors and the Federal Reserve Bank of San Francisco on their supervision of Silicon Valley Bank (SVB) prior to its failure on March 10.
“In sum, a number of warning signs existed at SVB in the months and years leading up to its closure, and per reports, these ‘risky practices were on the Federal Reserve’s radar for more than a year—an awareness that proved insufficient to stop the bank’s demise.’ Rather than effectively directing SVB management to take definitive, corrective action, it is apparent that the Federal Reserve supervisors and examiners neglected to intervene in a meaningful, appropriate way to rectify the bank’s deficiencies, ensure safe and sound operations, and prevent its ultimate failure,” the Republican senators wrote to the regulators.
The letter was signed by Sen. Tim Scott (R-SC), ranking member on the committee, along with U.S. Sens. Mike Crapo (R-ID), Mike Rounds (R-SD), Thom Tillis (R-NC), John Kennedy (R-LA), Bill Hagerty (R-TN), Cynthia Lummis (R-WY), J.D. Vance (R-OH), Katie Britt (R-AL), Kevin Cramer (R-ND), and Steve Daines (R-MT).
“The American people deserve transparency and accountability from their government officials, and they are entitled to understand precisely what Federal Reserve officials knew about the apparent risks associated with SVB, when they knew it, and why they failed to act to prevent the bank failure from occurring,” the senators continued.
They requested a response by April 6.