WASHINGTON — A pair of banking senators from both sides of the aisle pressed President Joe Biden to appoint an independent investigator to further look into the failures of Silicon Valley Bank, First Republic Bank and Signature Bank.
Sens. Jon Tester, D-Mont., and Thom Tillis, R-N.C., said that recent reports from the Federal Reserve, the Federal Deposit Insurance Corp. and state regulators were “insufficient” and called for an additional investigation led by “non-partisan experts.”
“Self-reflection, while appreciated, is insufficient to ensure stressors to our financial system of this magnitude are not repeated,” the lawmakers said. “Oversight efforts will benefit from a comprehensive examination spanning both federal and state financial regulators, as well as elsewhere in the federal government where response efforts are taking place.”
The independent investigation should also consider “the ongoing work to hold bank executives accountable.”
While Congress remains deeply divided over many issues, notably the debt ceiling talks, which have eclipsed discussions over the bank failures in some instances, there are some issues where lawmakers are finding bipartisan agreement. One of those is legislation that would further enable regulators to claw back compensation from executives of failed banks. Another area of bipartisan cooperation is pursuing a more fulsome accounting of what caused the recent bank failures and what could be done to prevent it from happening again.
The bipartisan ire on display at the recent testimony of the executives of the bailed bank trio is reminiscent of hearings following the 2008 financial crisis, after which Republicans and Democrats passed the Dodd-Frank Act.
“An outside, independent review of the supervisory and management errors that contributed to the failures would be a vital step toward restoring confidence in the banking system and preventing future failures,” Tester and Tillis wrote. “This thorough assessment will ultimately benefit taxpayers, policymakers, as well as regulators at the federal and state level and ensure well-run banks are not asked to once more make up for losses attributable to risky behavior by reckless executives and lackluster agency oversight.”