{"id":18917,"date":"2023-03-20T00:15:52","date_gmt":"2023-03-20T00:15:52","guid":{"rendered":"https:\/\/crowdfundjunction.com\/blog\/us-senator-calls-for-investigation-into-bank-failures-says-fed-chair-powell-bears-direct-responsibility-economics-bitcoin-news\/"},"modified":"2023-03-20T00:15:52","modified_gmt":"2023-03-20T00:15:52","slug":"us-senator-calls-for-investigation-into-bank-failures-says-fed-chair-powell-bears-direct-responsibility-economics-bitcoin-news","status":"publish","type":"post","link":"https:\/\/crowdfundjunction.com\/blog\/us-senator-calls-for-investigation-into-bank-failures-says-fed-chair-powell-bears-direct-responsibility-economics-bitcoin-news\/","title":{"rendered":"US Senator Calls for Investigation Into Bank Failures \u2014 Says Fed Chair Powell ‘Bears Direct Responsibility’ \u2013 Economics Bitcoin News"},"content":{"rendered":"

(Originally posted on : Bitcoin News )<\/b>
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U.S. Senator Elizabeth Warren has called for a \u201cthorough, independent investigation of the causes\u201d that led to the failure of Silicon Valley Bank (SVB) and Signature Bank. She alleges that Federal Reserve Chairman Jerome Powell \u201cbears direct responsibility\u201d for regulatory and supervisory issues involving the two banks.<\/strong><\/p>\n

Senator Elizabeth Warren Calls for Independent Investigation Into Bank Failures<\/h2>\n

U.S. Senator Elizabeth Warren (D-MA) called for an investigation into the recent collapse of major banks in a March 18 letter to the Treasury Department\u2019s deputy inspector general, the Federal Deposit Insurance Corporation (FDIC)\u2019s acting inspector general, and the Federal Reserve Board\u2019s inspector general.<\/p>\n

\u201cI am writing to ask that you immediately open a thorough, independent investigation of the causes of the bank management and regulatory and supervisory problems that resulted in this month\u2019s failure of Silicon Valley Bank (SVB) and Signature Bank and deliver preliminary results within 30 days,\u201d the senator from Massachusetts wrote. SVB was closed down<\/a> by regulators on March 10 while Signature Bank was seized<\/a> by the New York State Department of Financial Services a couple of days later.<\/p>\n

Warren stressed:<\/p>\n

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These failures were extraordinary events: they were the second- and third-largest bank failures in the nation\u2019s history.<\/p>\n<\/blockquote>\n

She added that \u201cuntil the Treasury Department, in consultation with the Federal Reserve and Federal Deposit Insurance Corporation (FDIC), determined them to be \u2018systemic risk\u2019 and intervened to guarantee billions of dollars of deposits,\u201d these bank failures \u201cthreatened economic contagion and severe damage to the banking and financial systems.\u201d<\/p>\n

While noting that \u201cThe bank\u2019s executives, who took unnecessary risks or failed to hedge against entirely foreseeable threats, must be held accountable for these failures,\u201d Warren claimed that \u201cthis mismanagement was allowed to occur because of a series of failures by lawmakers and regulators.\u201d<\/p>\n

She further alleged that Congress and former U.S. President Donald Trump \u201cweakened\u201d the Dodd-Frank Act and allowed banks like Silicon Valley Bank and Signature Bank \u201cto evade key rules and regulations.\u201d<\/p>\n

In addition, the lawmaker said the Federal Reserve under Chair Jerome Powell \u201cinitiated regulatory rollbacks,\u201d and the banks\u2019 supervisors, particularly the Federal Reserve Bank of San Francisco that oversaw Silicon Valley Bank, \u201cmissed or ignored key signals about the impending failure.\u201d Warren emphasized: \u201cThese regulatory rollbacks created an environment in which failure was inevitable.\u201d<\/p>\n

Senator Warren additionally told inspectors general:<\/p>\n

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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.<\/p>\n<\/blockquote>\n

\u201cI am particularly concerned that you avoid any interference from Fed Chair Jerome Powell, who bears direct responsibility for \u2014 and has a long record of failure involving \u2014 regulatory and supervisory matters involving these two banks,\u201d she cautioned.<\/p>\n

Moreover, Warren wrote: \u201cChair Powell muzzled regulators from any public mention of the regulatory failures that occurred under his watch. If these reports were true, they would reveal outrageous and inappropriate interventions by Chair Powell.\u201d<\/p>\n

In an interview with NBC News Sunday, Senator Warren further slammed the Federal Reserve chairman, stating:<\/p>\n

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He has had two jobs. One is to deal with monetary policy. One is to deal with regulation. He has failed at both \u2026 Look, I don\u2019t think he should be chairman of the Federal Reserve.<\/p>\n<\/blockquote>\n

Warren also recently blamed Silvergate Bank\u2019s failure on crypto risks<\/a> and claimed that Signature Bank collapsed because it embraced<\/a> crypto clients without sufficient safeguards.<\/p>\n

What do you think about Senator Elizabeth Warren calling for an independent investigation into recent bank failures and holding Fed Chair Jerome Powell accountable? Let us know in the comments section below.<\/strong><\/em><\/p>\n

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\nKevin Helms <\/h6>\n

\nA student of Austrian Economics, Kevin found Bitcoin in 2011 and has been an evangelist ever since. His interests lie in Bitcoin security, open-source systems, network effects and the intersection between economics and cryptography.

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Image Credits<\/b>: Shutterstock, Pixabay, Wiki Commons<\/em><\/p>\n

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