Senate Banking Committee Chairman Sherrod Brown (D-Ohio) sent a letter to the Treasury Department, FDIC and Federal Reserve requesting a “comprehensive review” of the failures of Silicon Valley Bank and Signature Bank. As regulators conduct their reviews, Brown said they should look for “broader vulnerabilities” in the banking system and take steps to mitigate them.
The Federal Reserve and FDIC will perform analyses of the banks’ failures as required by law. In the course of those investigations, however, Brown urged the agencies to “consider the magnitude” of the banks’ uninsured deposits and the role that social media may have played in causing or accelerating the failures. He said agencies should identify and close regulatory gaps, shortfalls or failures by state or federal regulators that contributed to the outcome, including capital, liquidity, stress testing, concentration risk and risk management.
He asked the agencies to “strengthen the guardrails for banks to prevent failures and mitigate contagion and panic risks to protect consumers and small businesses and to preserve small banks.”