Legislators Request Information on Regulators' Oversight of SVB and Signature Bank
House Financial Services Committee Chair Patrick McHenry (R-NC) and Senate Banking Committee Ranking Member Tim Scott (R-SC) requested information from the FDIC and FRB regarding their regulatory oversight of Silicon Valley Bank (“SVB”) and Signature Bank in the two years leading up to the banks' collapse. The legislators asked that the information be submitted by March 31, 2023.
In a letter addressed to FDIC Chair Martin Gruenberg, the legislators requested the following information:
- a comprehensive timeline of events detailing the FDIC’s supervisory- or resolution-related activities in association with SVB and/or Signature Bank; and
- the names and titles of all FDIC officials or employees involved in such supervisory- or resolution-related activities.
In a separate letter addressed to FRB Chair Jerome Powell, the legislators requested the following information:
- comprehensive timelines detailing the FRB’s (i) supervising, examining or lending to SVB and/or Signature Bank and (ii) recommendation to invoke the Systemic Risk Exception for both banks; and
- the names and titles of all FRB officials or employees (including, but not limited to, the Federal Reserve Banks of San Francisco and New York) who were involved in (i) supervising, examining or lending to the banks or (ii) the recommendation to invoke the Systemic Risk Exception.
- The Systemic Risk Exception allows the FDIC to resolve bailed banks in a manner that is not the "least cost," when the least cost resolution would have serious adverse effects on economic conditions or financial stability.
The legislators included a formal request that both the FDIC and the FRB preserve all existing and future documentation relating to the information requested in their respective letters.
The legislators stated that it is their responsibility to “evaluate the root causes of these bank failures” by “obtaining full information about what appears to be glaring bank mismanagement” and a “fundamental lack of prudence in bank risk and balance sheet management.”
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