Representatives from the Federal Deposit Insurance Corporation (FDIC) and the Federal Reserve will provide testimony about the failure of two major banks, Silicon Valley Bank and Signature Bank, at an next hearing that has just been announced by the United States House Financial Services Commission. Legislators are attempting to understand the factors that contributed to the failure of these institutions. The hearing is set to take place on March 29, and it will contain evidence from the head of the FDIC likewise as the vice chair of supervision for the Fed.
The Silicon Valley Bank was forced to close its doors on March 10 because of a run on the bank by its large depositors. The bulk of uninsured depositors who had more over $250,000 were covered by the Government once they stepped in. On the other hand, it was argued that Signature Bank did not have any complications with its solvency at the time of its closure on March 12. The FDIC was nonetheless given responsibility of the firm’s insurance procedure by New York’s regulatory authorities.
A report on the supervision and regulation of Silicon Valley Bank by the Federal Reserve is going to be published soon by Michael Barr of the Federal Reserve. Reports by recent reports, the Department of Justice and the Securities and Exchange Commission have both opened investigations into states that some officials at the bank sold shares in the weeks running up to the institution’s shutdown.
Several MPs have stated that exposure to cryptocurrency enterprises may have played a part in the failure of the banks, while supporters in the industry have maintained that Government officials were trying to “de-bank” cryptocurrency and blockchain tech enterprises. The House Committee on Financial Services has stated that it intends to conduct additional hearings in relation to this matter.
It is worth mentioning that Silicon Valley Bank is not connected in any way to Silicon Valley Bank Group, likewise known as SVB Financial Group. SVB Financial Group is a publicly listed company that specializes in supplying financial services to enterprises in the technology and life science industries. On the other hand, Signature Bank is a commercial bank that provides an extensive range of services and is principally active in the state of New York.