Senate Banking Committee Chairman Sherrod Brown, Ohio, said Tuesday he plans to hold a hearing this week on the collapse of two multibillion-dollar banks.
The Silicon Valley Bank, the sixteenth largest bank in the US, was shut down by regulators after investors began withdrawing funds amid concerns about the bank’s solvency. Some time later, Cryptocurrency-focused Signature Bank in New York was closed to prevent the potential start of another financial crisis.
Members of Congress were briefed on the matter over the weekend, and some again on Monday afternoon. Since then, several investigations into the collapses have been opened. The focus now is on Brown’s committee, which will spearhead the Senate response.
“We will hold a hearing as soon as we can get together and gather witnesses. We want the hearing to be good,” the Democrat told reporters in response to a question from Fox News Digital.
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WASHINGTON, DC – MARCH 14: Senate Banking Committee Chairman Senator Sherrod Brown (D-Ohio) speaks to reporters on the Senate Subway en route to a vote at the U.S. Capitol on March 14, 2023. (Photo by Drew Angerer/Getty Images)
Brown did not give a specific timeline, but indicated that discussions are ongoing about whether lawmakers will seek testimony from failed bank executives or Biden administration officials.
“I’m not sure if we’re inviting bank executives or just regulators, we haven’t decided yet,” Brown said.
Sen. Tina Smith, a Democratic committee member, told Fox News Digital “potentially yes” when asked if she would like to hear from bank executives in future committee hearings.
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A customer stands outside the closed headquarters of Silicon Valley Bank (SVB) on March 10, 2023 in Santa Clara, California. The Silicon Valley Bank was closed Friday morning by California regulators and placed under the control of the US Federal Deposit Insurance Corporation. (Justin Sullivan/Getty Images)
Non-committee Democrat Senator Tim Kaine, of Virginia, said having bank executives testify would be “a smart move.”
But Banking Committee member Senator J. D. Vance of R-Ohio doubted much could be gleaned from the testimony of bank executives.
“You know, I’m glad to hear from the CEOs,” Vance said. “I will say that I don’t think we will learn much by talking to them. They clearly screwed up, I suspect they will be in CYA mode knowing they will potentially face even criminal charges over the next few years.”
He added: “What I really want to hear is the FDIC, Treasury and [Federal Reserve] about why they decided to bail out SVB in the first place.”
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UNITED STATES – MARCH 7: Senator JD Vance, R-Ohio, expressed interest in hearing from Biden administration officials about the banking collapse. (Tom Williams/CQ-Roll Call, Inc via Getty Images)
“The argument that it was necessary to prevent bank runs does not hold water, you could provide liquidity to the financial system without bailing out uninsured SVB deposits,” he said.
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The Biden administration insisted that federal regulators were not bailing out banks when they announced Sunday night that they were intervening to ensure that all SVB depositors get their money back, despite what the Federal Deposit Insurance Corporation (FDIC) dictates, that cash in the Bank is insured only up to $250,000.
Vance indicated that he would like to hear from the Federal Reserve Bank of San Francisco in particular, explaining, “I don’t know why they didn’t anticipate this … it’s their job to see impending bank failures in their portfolio.”
