US Senator Calls for Investigation Into Bank Failures — Says Fed Chair Powell ‘Bears Direct Responsibility’

U.S. Senator Elizabeth Warren has called for a “thorough, autarkic probe of the causes” that led to the nonaccomplishment of Silicon Valley Bank (SVB) and Signature Bank. She alleges that Federal Reserve Chairman Jerome Powell “bears nonstop responsibility” for regulatory and supervisory issues involving the 2 banks.

Senator Elizabeth Warren Calls for Independent Investigation Into Bank Failures

U.S. Senator Elizabeth Warren (D-MA) called for an probe into the caller illness of large banks successful a March 18 missive to the Treasury Department’s lawman inspector general, the Federal Deposit Insurance Corporation (FDIC)’s acting inspector general, and the Federal Reserve Board’s inspector general.

“I americium penning to inquire that you instantly unfastened a thorough, autarkic probe of the causes of the slope absorption and regulatory and supervisory problems that resulted successful this month’s nonaccomplishment of Silicon Valley Bank (SVB) and Signature Bank and present preliminary results wrong 30 days,” the legislator from Massachusetts wrote. SVB was closed down by regulators connected March 10 portion Signature Bank was seized by the New York State Department of Financial Services a mates of days later.

Warren stressed:

These failures were bonzer events: they were the second- and third-largest slope failures successful the nation’s history.

She added that “until the Treasury Department, successful consultation with the Federal Reserve and Federal Deposit Insurance Corporation (FDIC), determined them to beryllium ‘systemic risk’ and intervened to warrant billions of dollars of deposits,” these slope failures “threatened economical contagion and terrible harm to the banking and fiscal systems.”

While noting that “The bank’s executives, who took unnecessary risks oregon failed to hedge against wholly foreseeable threats, indispensable beryllium held accountable for these failures,” Warren claimed that “this mismanagement was allowed to hap due to the fact that of a bid of failures by lawmakers and regulators.”

She further alleged that Congress and erstwhile U.S. President Donald Trump “weakened” the Dodd-Frank Act and allowed banks similar Silicon Valley Bank and Signature Bank “to evade cardinal rules and regulations.”

In addition, the lawmaker said the Federal Reserve nether Chair Jerome Powell “initiated regulatory rollbacks,” and the banks’ supervisors, peculiarly the Federal Reserve Bank of San Francisco that oversaw Silicon Valley Bank, “missed oregon ignored cardinal signals astir the impending failure.” Warren emphasized: “These regulatory rollbacks created an situation successful which nonaccomplishment was inevitable.”

Senator Warren additionally told inspectors general:

It is besides captious that your probe beryllium wholly autarkic and escaped of power from the slope executives oregon regulators that were liable for enactment that led to these slope failures.

“I americium peculiarly acrophobic that you debar immoderate interference from Fed Chair Jerome Powell, who bears nonstop work for — and has a agelong grounds of nonaccomplishment involving — regulatory and supervisory matters involving these 2 banks,” she cautioned.

Moreover, Warren wrote: “Chair Powell muzzled regulators from immoderate nationalist notation of the regulatory failures that occurred nether his watch. If these reports were true, they would uncover outrageous and inappropriate interventions by Chair Powell.”

In an interrogation with NBC News Sunday, Senator Warren further slammed the Federal Reserve chairman, stating:

He has had 2 jobs. One is to woody with monetary policy. One is to woody with regulation. He has failed astatine some … Look, I don’t deliberation helium should beryllium president of the Federal Reserve.

Warren besides precocious blamed Silvergate Bank’s nonaccomplishment connected crypto risks and claimed that Signature Bank collapsed due to the fact that it embraced crypto clients without capable safeguards.

What bash you deliberation astir Senator Elizabeth Warren calling for an autarkic probe into caller slope failures and holding Fed Chair Jerome Powell accountable? Let america cognize successful the comments conception below.

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