The House Financial Services Committee has scheduled a hearing on the collapse of Signature Bank and SVB, which threatened to derail the US financial system.
According to a March 17th announcement by the House Financial Services Committee, the first hearing on the sudden collapse of Silicon Valley Bank (SVB) and Signature Bank has been set for March 29th.
Chair of the FDIC board of directors Martin J. Gruenberg and the Federal Reserve vice chair (VC), Michael S. Barr, will testify at the first hearing. More witnesses will be invited, according to the announcement.
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In the announcement, US representatives Maxine Waters and Patrick McHenry noted:
The House Financial Services Committee is committed to getting to the bottom of the failures of Silicon Valley Bank and Signature Bank. This hearing will allow us to begin to understand why and how these banks failed.
Shortly before SVB failed, the bank’s executives were paid significant bonuses. US president Joe Biden recently requested Congress to ensure financial regulators had the authority to claw back compensation given to executives at failed banks.
After taking over SBV, the FDIC announced that depositors at the bank would be covered to the full. On the contrary, Signature Bank claimed it had no issues with solvency at the time of its closure. However, New York’s financial regulator seized the bank's operations and handed them over to the FDIC.
Some legislators have pointed to the potential link between crypto and the banks as the main reason for the collapse. In response, crypto advocates have claimed the government is sending a message to banks to stop offering their services to the crypto world.
While the authorities are awaiting SVB and Signature Bank hearing, the Department of Justice (DoJ) and the US Securities and Exchange Commission (SEC) have launched probes into the Silicon Valley Bank executive who sold stock leading up to the shattering of the bank.
