Representatives of the Federal Deposit Insurance Corporation (FDIC) and the Federal Reserve will provide testimony on the bankruptcies of two major banks, Silicon Valley Bank and Signature Bank, at an upcoming hearing just announced by the Federal Deposit Insurance Commission. United States House of Representatives. Lawmakers are trying to understand the factors that contributed to the failure of these institutions. The hearing is scheduled for March 29 and will contain evidence from the head of the FDIC as well as the Fed’s vice president of supervision.
Silicon Valley Bank was forced to close its doors on March 10 as a result of a run on the bank by its large depositors. Most uninsured depositors who had more than $250,000 were covered by the government once they stepped in. On the other hand, it was stated that Signature Bank did not have any problems with its solvency at the time of its closure on March 12. However, New York regulatory authorities gave the FDIC responsibility for the company’s insurance procedure.
Michael Barr of the Federal Reserve will soon publish a report on the Federal Reserve’s supervision and regulation of Silicon Valley Bank. According to recent reports, the Department of Justice and the Securities and Exchange Commission have opened investigations into allegations that some bank officials sold shares in the weeks before the institution closed.
Some MPs have indicated that exposure to crypto companies may have played a role in bankruptcies, while industry supporters have argued that government officials were attempting to “unbank” crypto and blockchain companies. The House Committee on Financial Services has indicated that it plans to hold additional hearings on this matter.
It is important to note that Silicon Valley Bank is not connected in any way with Silicon Valley Bank Group, also known as SVB Financial Group. SVB Financial Group is a publicly traded company that specializes in providing financial services to companies in the technology and life sciences industries. On the other hand, Signature Bank is a commercial bank that provides a wide range of services and is mainly active in the state of New York.