House Republicans seek answers about federal response to bank failures

Top Republicans on the House Financial Services Committee today called on federal regulators to explain the decision to invoke an emergency systemic risk exception in the failures of the Silicon Valley Bank and Signature Bank. In letters to Treasury Secretary Janet Yellen and FDIC Chairman Martin Gruenberg, committee Chairman Patrick McHenry (R-N.C.) and Vice Chairman French Hill (R-Ark.) posed a series of questions about the federal response, including whether there was a viable private sector option for the banks.

“Given the unprecedented speed of the bank failures and subsequent effects on the U.S. financial system, it is critical that Congress understand the events leading up to and following the failures of both Silicon Valley Bank and Signature Bank,” the lawmakers wrote in the letter to Gruenberg. “In particular, Congress must understand the FDIC’s role both as receiver for the failed banks and as the primary federal banking agency for Signature Bank.”

The committee will hold the first of a series of hearings on the bank failures on March 29. The Senate Banking Committee will hold a hearing on the failures on March 28. Committee Chairman Sherrod Brown (D-Ohio) and Ranking Member Tim Scott (R-S.C.) today called on the CEOs of both banks to either testify at the Senate hearing or at a future hearing.