House Financial Services Committee Leaders Urge GAO to Examine Bank Closures
House Financial Service Committee Chair Patrick McHenry (R-NC) and Ranking Member Maxine Waters (D-CA) urged the Government and Accountability Office ("GAO") to undertake an immediate examination of the causes leading to the closures of Silicon Valley Bank ("SVB") and Signature Bank.
In the letter to the GAO, the leaders stated that it was "critical" that they understand, with the help of an external evaluation and investigation by the GAO, the events leading up to SVB's and Signature's closures and, in particular, related management, supervisory and examination failures. The Congressmembers asked the GAO to investigate (i) reports of "questionable" stock sales and bonus payments that took place right before the closures and (ii) the involvement by investment bank underwriters, credit rating agencies and the Federal Home Loan Bank system in the banks’ failures. Further, the Congressmembers questioned why the FDIC was unable to secure a buyer for SVB.
The Congressmembers also asked the GAO to identify any other banking entities that may be facing a similar situation as SVB and Signature leading up to their closure, in "asset growth, deposit concentration, and maturity within their portfolios."
The Congressmembers requested an interim report from GAO by April 28, 2023.
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