The House Financial Services Committee is scheduled to hold a hearing later this month on the collapse of Silicon Valley Bank and Signature Bank, which spooked markets and pumped uncertainty into the banking industry.
The hearing — set for March 29 — will feature testimony from Martin Gruenberg, the chairman of the Federal Deposit Insurance Corporation’s (FDIC) Board of Directors, and Michael Barr, the vice chair for supervision of the Federal Reserve’s Board of Governors.
“The House Financial Services Committee is committed to getting to the bottom of the failures of Silicon Valley Bank and Signature Bank,” Reps. Patrick McHenry (R-N.C.) and Maxine Waters (D-Calif.), the chairman and ranking member of the committee, said in a statement on Friday.
“This hearing will allow us to begin to understand why and how these banks failed. As Chairman and Ranking Member, we take our oversight duties seriously,” they continued. “We are working around the clock to deliver answers to the American people in order to protect depositors, promote the safety and soundness of America’s banks, and strengthen our financial system.”
The pair said they “will conduct this hearing without fear or favor to get the answers the American people deserve.”
The committee said it “will hold more hearings as appropriate.”
The announcement of the first hearing comes exactly one week after federal regulators took over Silicon Valley Bank following a run on the bank amid liquidity issues. Days later, state regulators seized control of Signature Bank in New York after depositors ran to withdraw their money.
The failures of Silicon Valley Bank and Signature Bank are now the second and third-largest bank collapses in U.S. history. The Department of Justice and Securities and Exchange Commission are investigating the failure of Silicon Valley Bank.
Additionally, Barr is leading the Federal Reserve Board’s review of the supervision and regulation of Silicon Valley Bank. The review will be released publicly by May 1, the board said.
The bank failures dominated Capitol Hill this week, with lawmakers reacting to the news and pointing fingers at what caused the collapses. A number of Democrats are blaming a 2018 deregulation bill that rolled back regulations put into place under the 2010 Dodd-Frank Act for small and mid-size banks. Former President Trump signed the bill into law, but a handful of Democrats joined Republicans in supporting the measure on Capitol Hill.
Some Republicans have said that federal regulators in San Francisco did not conduct strong enough oversight, while others claimed that Silicon Valley Bank was “woke,” pointing to environmental, social and governance (ESG) investments and diversity and inclusion initiatives.
On Friday, SVB Financial Group, the parent company of Silicon Valley Bank, filed for bankruptcy.
Asked on Friday if any congressional action can be taken to react to the Silicon Valley Bank situation, Speaker Kevin McCarthy (R-Calif.) told reporters “I think you want to get all the facts but it seems as though the regulators didn’t do their job.”
“I don’t know that it needs new legislation,” he added.
McCarthy also said McHenry “has a number of hearings that he’s gonna have so you could actually get all the facts.”
Pressed on what role Congress plays in dealing with the bank situation the Speaker again pointed to the California regulators, saying it “seems as though” that they “didn’t do their job,” which is “concerning” to him.
“Questions for California regulators out there and the governor too on what they missed,” he added.