Image
PROMO 660 x 440 Finance - Glass Piggy Bank with Coins - iStock

Oversight lawmakers continue to dig into SVP bank failure

© iStock.com/Pogonici
Casey Harper

(The Center Square) – The House Oversight lawmakers tasked with finding out why Silicon Valley Bank failed earlier this year and threatened the health of the entire economy are pushing deeper in their investigation.

The investigation continues after lawmakers said earlier this year there is evidence that the San Francisco Federal Reserve Board knew of Silicon Valley Bank’s woes since 2021 but did little about it.

Image
PROMO 64J1 Finance - Goverment Bank Federal Reserve Building - iStock pabradyphoto

© iStock pabradyphoto

“SF Fed appears to have failed to adequately supervise SVB and respond to the bank’s mismanagement, ultimately leading to SVB’s seizure by federal regulators – the second largest bank failure in U.S. history – and threatening a panic in our banking system,” House Oversight Republicans, led by Chairman James Comer, R-Ky., said in a letter to the president and CEO of the Federal Reserve Bank of San Francisco earlier this year.

House Committee on Oversight and Accountability Chairman James Comer, R-Ky., and Subcommittee on Health Care and Financial Services Chairwoman Lisa McClain, R-Mich., sent a letter to the SF Fed on Monday demanding more information, arguing the board has not adequately responded to information requests.

The lawmakers said the SF Fed was not doing enough to cooperate with the investigation, only providing publicly available data and not directly responding to the needs of requests.

Image
PROMO Government - Capitol Washington DC United States - iStock - Luka Banda

© iStock - Luka Banda

“Due to our concerns with the inadequacy of the SF Fed’s response, on May 25, 2023, Committee staff held a call with SF Fed staff,” the letter said. “During that call, the SF Fed informed Committee staff that upon receipt of our letter, the SF Fed immediately contacted your staff, who informed them that the Fed Board was asserting privilege over a majority of the requested materials as confidential supervisory information (CSI), and that the SF Fed would not be able to provide any more information to the Committee.”

The lawmakers say the SF Fed later agreed to hand over nonpublic documents but has since not been responsive to the committee’s requests.

The SF Fed declined to comment.