Senate Banking Committee Chairman Sherrod Brown, D-Ohio, said Tuesday that he’s planning a hearing on this week’s collapse of two multi-billion dollar banks.
Silicon Valley Bank, the sixteenth-largest bank in the U.S., was shut down by regulators following a rush of investors withdrawing funds, driven by concerns over the bank’s solvency. A short while later, the crypo-focused Signature Bank was shut down in New York in a bid to stave off the potential beginning of another financial crisis.
Members of Congress were briefed on the matter over the weekend, and some again on Monday afternoon. Since then, multiple investigations have been opened into the collapses. The spotlight is now on Brown’s committee to lead the Senate’s response.
“We’ll do a hearing as soon as we can get things together and get the witnesses. We want to make it a good hearing,” the Democrat told reporters in response to a question by Fox News Digital.
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WASHINGTON, DC – MARCH 14: Senate Banking Committee chairman Sen. Sherrod Brown (D-OH) speaks to reporters in the Senate subway on his way to a vote at the U.S. Capitol March 14, 2023 (Photo by Drew Angerer/Getty Images)
Brown did not share a specific timeline but indicated that discussions were ongoing over whether lawmakers will seek testimony from the leaders of the failed banks or from Biden administration officials.
“I’m not sure if we invite bank executives or just the regulators, we haven’t decided,” Brown said.
Sen. Tina Smith, a Democrat on the panel, told Fox News Digital, “potentially yes” when asked if she would want to hear from the bank CEOs at a future prospective committee hearing.
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A customer stands outside of a shuttered Silicon Valley Bank (SVB) headquarters on March 10, 2023 in Santa Clara, California. Silicon Valley Bank was shut down on Friday morning by California regulators and was put in control of the U.S. Federal Deposit Insurance Corporation. (Justin Sullivan/Getty Images)
A Democrat not on the committee, Sen. Tim Kaine, D-Va., said getting the bank CEOs to testify would be a “smart move.”
But across the aisle, Banking Committee member Sen. JD Vance, R-Ohio, doubted how much could be gleaned from bank executives’ testimony.
“You know, I’m happy to hear from the CEOs,” Vance said. “I will say that I don’t think we’re going to learn a whole lot from talking to them. They clearly screwed up, I suspect they’re going to be in CYA-mode, knowing they’re going to face potentially even criminal liability over the next couple of years.”
He added, “What I really want to hear from is the FDIC and the Treasury and the [Federal Reserve] about why they decided to bail SVB out in the first place.”
UNITED STATES – MARCH 7: Sen. J.D. Vance, R-Ohio, indicated an interest in hearing from Biden administration officials on the banking collapse. (Tom Williams/CQ-Roll Call, Inc via Getty Images)
“The argument that it was necessary to prevent a bank run doesn’t hold water, you could have provided liquidity to the financial system without bailing out the SVB uninsured deposits,” he said.
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The Biden administration has insisted that federal regulators were not bailing out the banks when they announced on Sunday night that they were stepping in to ensure all of SVB’s depositors would get their money back, despite Federal Deposit Insurance Corporation (FDIC) dictating that cash in the bank is only insured up to $250,000.
Vance indicated he wanted to hear in particular from the Federal Reserve Bank of San Francisco, explaining, “I don’t know why they didn’t see this coming… this is their job, to see impending bank failures within their portfolio.”
