American Banker: Warren scolds Fed for 'lack of accountability' on SVB execs

It's been two years since Silicon Valley Bank failed and at least one lawmaker is still waiting for answers — and legal action.

Sen. Elizabeth Warren, D-Mass., sent a letter to Federal Reserve Chair Jerome Powell on Monday afternoon chastising the Fed Board of Governors for not holding Silicon Valley Bank's leaders individually accountable for its demise.  

"These executives drove the bank into the ground, requiring extraordinary government intervention and costly support to stave off another catastrophic banking crisis that would have harmed working families," wrote Warren, the ranking member on the Senate Banking Committee. "But the Federal Reserve Board has not exercised its clear enforcement authorities against the individuals that egregiously violated banking laws and regulations."

In her letter, Warren blamed the collapse of SVBThis link opens in new window or tab. on its executives, who saw the Santa Clara, California, bank triple in size in a matter of three years, largely on the back of uninsured deposits from venture capital firms and executives. She also criticized the bank's decision to sell off hedges on its long-dated securities holdings just as the Fed was raising interest rates. 

She noted that the failure of the bank threatened the stability of the banking system and required "costly" emergency actions from federal regulators to stave off a broader crisisThis link opens in new window or tab.. She also expressed disappointment in how the Fed has followed up on the episode.

...

Read the full article here.

• Print
• Email
• Tweet