In full transparency, the following is a media release from Sen. Elizabeth Warren’s office. She was elected by voters in the Commonwealth of Massachusetts to serve the state in Washington DC in the US Senate. She is a Democrat. (stock photo)
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WASHINGTON DC – – U.S. Senator Elizabeth Warren (D-Mass.) wrote the Inspectors General at the Department of Treasury, the Federal Deposit Insurance Corporation (FDIC), and the Board of Governors of the Federal Reserve, urging them to immediately open a thorough, independent investigation of the causes of the bank management and regulatory and supervisory problems that resulted in this month’s failure of Silicon Valley Bank (SVB) and Signature Bank (Signature), and deliver preliminary results to Congress and the public within 30 days.
“The bank’s executives, who took unnecessary risks or failed to hedge against entirely foreseeable threats, must be held accountable for these failures,” wrote Senator Warren. “But this mismanagement was allowed to occur because of a series of failures by lawmakers and regulators. Congress and President Trump weakened the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”) and allowed banks like SVB and Signature to evade key rules and regulations. The Federal Reserve under Chair Powell initiated key regulatory rollbacks. And the banks’ supervisors – particularly the Federal Reserve Bank of San Francisco, which oversaw SVB – missed or ignored key signals about their impending failure. These regulatory rollbacks created an environment in which failure was inevitable.”
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Earlier this week, Senator Warren called on Fed Chair Powell to recuse himself from an internal probe on Silicon Valley Bank’s collapse.
Shortly after, reporting revealed that Biden administration officials pushed to spotlight shortcomings in financial regulation that contributed to SVB’s collapse, but Chair Powell prevented them from doing so.
“It is also critical that your investigation be completely independent and free of influence from the bank executives or regulators that were responsible for action that led to these bank failures,” continued Senator Warren. “I am particularly concerned that you avoid any interference from Fed Chair Jerome Powell, who bears direct responsibility for – and has a long record of failure involving – regulatory and supervisory matters involving these two banks. I have already asked Chair Powell to recuse himself from the Fed’s internal investigation of this matter, but he has not yet responded to this request. This silence is troubling, as are reports that last week, as officials sought to develop a plan responding to SVB’s failure, Chair Powell muzzled regulators from any public mention of the regulatory failures that occurred under his watch. If these reports are true, they would reveal outrageous and inappropriate interventions by Chair Powell.”
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Senator Warren called on the inspectors general to provide Congress and the public with a full and unredacted preliminary report on the findings of their investigation, including any recommendations, within 30 days.
Read the text of the letter here.
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MetroWest Medical Center 
Representative Jack Lewis