Congress To Investigate SVB And Signature Bank For Crypto Failures

Key Points:

• Congress has announced a hearing to investigate the collapse of Silicon Valley Bank and Signature Bank, with representatives from the Federal Deposit Insurance Corporation and Federal Reserve scheduled to testify on March 29.
• The collapse of the banks has led to some lawmakers pointing to exposure to crypto firms as potential culprits, while advocates in the space have argued that government officials were seeking to “de-bank” crypto and blockchain companies.

The United States House Financial Services Commission has announced a hearing to investigate the collapse of SVB and Signature Bank, with representatives from the Federal Deposit Insurance Corporation and Federal Reserve scheduled to testify on March 29.

FDIC chair Martin Gruenberg and Fed Vice Chair for Supervision Michael Barr are expected to provide testimony. Representatives Maxine Waters and Patrick McHenry initiated the hearing. They stated that this hearing will help the committee understand why and how the banks failed.

The recent collapse of Silicon Valley Bank, which occurred on March 10, followed a bank run among major depositors. However, the government stepped in to protect most uninsured depositors. Meanwhile, Signature Bank was reportedly not facing solvency issues when it closed on March 12. New York regulators intervened and gave the FDIC control of the bank’s insurance process.

The collapse of the banks has led to some lawmakers pointing to exposure to crypto firms as potential culprits. In contrast, advocates in the space have argued that government officials were seeking to “de-bank” crypto and blockchain companies. Barr is expected to release a report on the Fed’s supervision and regulation of Silicon Valley Bank. At the same time, the Department of Justice and Securities and Exchange Commission have also reportedly launched their investigations into the actions of some of the bank’s executives in the lead-up to its collapse.

The House Financial Services Committee has indicated that it expects to hold multiple hearings.

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