During a Senate hearing, Sinema uncovered that there was a substantial lag between when Silicon Valley Bank’s problems were first raised in 2021 and insufficient action was taken before its collapse earlier this month
WASHINGTON – Arizona senior Senator Kyrsten Sinema and other members of the Senate Banking Committee sent a letter urging the U.S. Government Accountability Office to conduct an independent investigation into federal regulators’ failure to conduct proper oversight of Silicon Valley Bank (SVB).
“As the Committee seeks to better understand the collapse of SVB and Signature Bank, it is important to revisit these issues related to the supervision and regulation of banks to determine if the proper scrutiny by regulators and appropriate and timely responses from the regulated entities is occurring,” wrote Sinema and her colleagues.
In a recent Senate Banking Committee hearing examining the failures that led to SVB’s collapse, Sinema questioned Michael Barr, Vice Chair for Supervision of the Federal Reserve’s Board of Governors, if and when he was made aware of deficiencies at SVB prior to its collapse. Sinema discovered that Vice Chair Barr was not personally notified about the glaring problems at SVB until February 2023 – weeks before the Bank’s failure – despite deficiencies being first raised in Fall 2021 and concerns identified as early as 2019.
In their letter, Sinema and members of the Senate Banking Committee called on the Government Accountability Office to conduct an examination of the supervisory practices of regulators to uncover what went wrong and how future oversight failures can be avoided.
Click HERE to read the Senators’ letter.
In the wake of SVB’s collapse, Sinema and Republican Senator Thom Tillis (N.C.) led a bipartisan group of Senators questioning the Federal Reserve about clear warning signs – including bank leadership’s clear failure to appropriately manage customer deposits – it missed as part of its responsibilities to conduct oversight and examinations ahead of Silicon Valley Bank’s collapse. Sinema additionally cosponsored the DEPOSIT Act – legislation that would claw back profits made by bank executives on the sale of stocks and compensation bonuses earned within 60 days of a bank failure.