Federal Reserve Board Vice Chairman Michael Barr listens to participants during a hearing at the Federal Reserve Building, Friday, Sept. 23, 2022, in Washington. AP Photo/Manuel Bales Sen
The nation’s top financial regulator, the Federal Reserve, and other agencies have pledged to take the necessary steps to protect depositors and the banking system. Two weeks after the collapse of two large banks It caused a financial crisis in the United States and Europe.
“We’re prepared to use all of our tools for any size facility as needed,” Michael Barr, the feds’ vice chairman for regulation, said in a written hearing Tuesday. Senate Banking Committee.
The Senate panel will hold its first regular congressional hearings on the failure of Silicon Valley Bank and New York-based Signature Bank, and regulatory and regulatory deficiencies at the Fed and other agencies. The committee will ask the bar and other officials About the response of the governmentincluding the emergency decision to insure all deposits in both banks, although most insureds exceed the $250,000 limit.
The Fed has come under heavy criticism from groups that support tighter financial controls. Not having enough control Silicon Valley Bank and prevent failure and the Bar may face tough questions from members of both parties.
In his prepared testimony, he blamed Silicon Valley Bank’s management for the failure. But in an earlier review of the bank’s failure, he said the Fed would ensure it was “fully accounted for any supervisory or regulatory deficiencies”.
Barr said officials at the Federal Reserve Bank of San Francisco, which directly oversees the Silicon Valley bank, have sent several warnings to the bank’s management about the risks it is taking, with large amounts of Treasuries and other bonds losing value as interest rates rise. get up. Ultimately, when large depositors wanted to withdraw more than $40 billion in one day, the bank was unable to pay the money. On March 10, the bank was taken over by the Federal Deposit Insurance Corporation.
As in 2010 In testimony prepared by Barr in mid-February 2023, Fed staff told the Board of Governors that rate hikes threaten the finances of some banks, highlighting the risk at Silicon Valley Bank in particular.
“But as it turned out,” says Barr, “the full extent of the bank’s vulnerability was not revealed until the unexpected bank launch on March 9.
We offer you some site tools and assistance to get the best result in daily life by taking advantage of simple experiences