• US lawmakers held a meeting with the Federal Reserve and FDIC to discuss the sudden collapse of Silicon Valley Bank.
• Democratic Representative Maxine Waters discussed the closure of SVB with regulators, expressing her alarm at its failure.
• Treasury Secretary Janet Yellen met with banking regulators on Friday to discuss the bank’s collapse and reaffirm the resiliency of America’s financial system.
Lawmakers Seek Answers from Fed, FDIC
US lawmakers held a meeting with representatives from both the Federal Reserve (Fed) and Federal Deposit Insurance Corporation (FDIC) on Friday to discuss the swift and stunning collapse of Silicon Valley Bank (SVB). Democratic US Representative Maxine Waters expressed her alarm at the failure of SVB – which marks one of the largest bank failures in American history – during discussions with federal bank regulators as well as representatives from Treasury Department. Representatives from both the Republican Party and Democratic Party were present at the meetings.
Proposed Actions by Regulators
In response to SVB’s collapse, The FDIC took control of the bank and created a new entity called Deposit Insurance National Bank of Santa Clara, which now holds all insured deposits formerly held by SVB. Additionally, Treasury Secretary Janet Yellen met with banking regulators on Friday including those from FDIC, to address issues surrounding SVB’s closure while reaffirming confidence in America’s financial markets and regulatory system.
Reactions From Lawmakers
Several other lawmakers have also spoken out about their concerns regarding SVB’s unexpected failure. Representative Ro Khanna said he contacted White House and Treasury Department officials to further understand what happened with SVB. Representative Maxine Waters also released a statement voicing her alarm about this incident but expressing confidence in America’s financial market system as well as its regulatory bodies’ ability to protect consumers and investors from similar events occurring in future.
The Collapse Of Silvergate Bank
The swift demise of Silicon Valley Bank comes just two days after another crypto-friendly lender – Silvergate Bank – collapsed into liquidation due to huge losses it suffered following FTX’s fall last November 2020. Silvergate had sold $5.2 billion worth debt securities off its balance sheet at great loss in order to cover around $4 billion customer withdrawals when FTX went bankrupt.
The failure of Silicon Valley Bank serves as an example for how quickly banks can succumb under pressure when faced with massive losses or customer withdrawals, especially when their business practices are not protected by regulations or government bailouts like traditional lenders typically are . Despite these incidents however, US leaders remain confident that America has effective tools available for responding effectively whenever such events occur within its financial market system