Senator insisted on holding those responsible accountable to rebuild trust in the American banking system
WASHINGTON – Arizona senior Senator Kyrsten Sinema, a member of the Senate Banking Committee, demanded answers from federal bank regulators, specifically the Federal Reserve, on the failure to conduct appropriate oversight of Silicon Valley Bank.
“The banking system is built on trust. Families trust that their hard-earned savings are safe in the U.S. banking system. The failure of Silicon Valley Bank on the Federal Reserve’s watch very clearly calls into question whether or not some of that trust was misplaced,” said Sinema.
Sinema pressed federal regulators about how they missed clear warning signs that something was wrong with Silicon Valley Bank before regulators could take appropriate action, noting that retail participants and social media users were able to spot deficiencies in SVB before those who have the appropriate supervisory tools and authority to do so.
During the hearing, Sinema asserted that much of the blame is with bank executives, many of whom took bonuses and sold stock in the days leading up to the Bank’s failure, and that those responsible must be held accountable. In the wake of Silicon Valley Bank’s collapse, Sinema 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.
Earlier this month, 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.