Sinema called for the Federal Reserve to answer for missed warning signs ahead of Silicon Valley Bank’s Collapse
WASHINGTON – Arizona senior Senator Kyrsten Sinema – a member of the Senate Banking Committee – released the following statement on the Federal Reserve’s review of Silicon Valley Bank following its collapse:
“Today, the Federal Reserve echoed many of our concerns surrounding the collapse of Silicon Valley Bank and pledged to take action moving forward. The report is clear: the Fed knew Silicon Valley Bank was in trouble, had the tools to fix it, and failed to respond in time.
“The Fed must now make meaningful cultural and operational changes to restore confidence in the banking system. I will work with members of both parties to hold the Fed accountable, increase transparency and oversight, and ensure these critical changes are made.”
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 also introduced the bipartisan Financial Regulators Transparency Act – alongside Republican Senator Thom Tillis (N.C.) and Democratic Senator Elizabeth Warren (Mass.) – that increases transparency and allows congressional oversight of the Federal Reserve and other banking regulators’ activities around bank supervision, examination, and regulation. This bill will allow Senators to conduct much-needed oversight of cultural and operational changes that have been recommended and are urgently needed at the Federal Reserve. The Senators’ bill follows federal regulators’ apparent failure to identify clear mismanagement ahead of the Silicon Valley Bank and Signature Bank collapse. Sinema also 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). Prior to sending the letter, Sinema uncovered in a Banking Committee hearing 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.
In addition to her oversight actions, Sinema cosponsored the DEPOSIT Act – legislation that would claw back bank executives’ salaries and stock sales if their bank fails on their watch.