{"id":19279,"date":"2023-03-29T21:19:18","date_gmt":"2023-03-29T21:19:18","guid":{"rendered":"https:\/\/crowdfundjunction.com\/blog\/senate-banking-committee-holds-hearing-on-recent-bank-collapses-calls-for-tougher-regulations-regulation-bitcoin-news\/"},"modified":"2023-03-29T21:19:18","modified_gmt":"2023-03-29T21:19:18","slug":"senate-banking-committee-holds-hearing-on-recent-bank-collapses-calls-for-tougher-regulations-regulation-bitcoin-news","status":"publish","type":"post","link":"https:\/\/crowdfundjunction.com\/blog\/senate-banking-committee-holds-hearing-on-recent-bank-collapses-calls-for-tougher-regulations-regulation-bitcoin-news\/","title":{"rendered":"Senate Banking Committee Holds Hearing on Recent Bank Collapses, Calls for Tougher Regulations \u2013 Regulation Bitcoin News"},"content":{"rendered":"

(Originally posted on : Bitcoin News )<\/b>
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On Tuesday, the U.S. Senate Committee on Banking, Housing, and Urban Affairs, also known as the Senate Banking Committee, held a hearing to discuss the recent bank collapses in the United States and the regulatory response. Throughout the testimonies, digital assets and crypto businesses were mentioned. Senate Banking Committee chairman Sherrod Brown claimed on Tuesday that Signature Bank \u201cfound itself in the middle of Sam Bankman-Fried\u2019s crime spree at the crypto exchange FTX.\u201d<\/strong><\/p>\n

Regulators Highlight Bank Exposure to Crypto Asset Businesses in Senate Banking Committee Hearing About Bank Failures<\/h2>\n

Following the collapse of Silvergate Bank, Silicon Valley Bank, and Signature Bank, the Senate Banking Committee held a hearing<\/a> to discuss the situation and its implications. The hearing witnesses included Martin Gruenberg, chairman of the Federal Deposit Insurance Corporation (FDIC); Michael Barr, vice chairman for supervision with the Board of Governors of the Federal Reserve; and Nellie Liang, the Treasury\u2019s domestic finance undersecretary, in addition to committee chairman Sherrod Brown and ranking member Tim Scott.<\/p>\n

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Senate hearing on recent bank failures happening now. All 3 witnesses are folks I named as architects of OCP2.0https:\/\/t.co\/xRQ8LONpGA<\/a><\/p>\n

\u2014 nic \ud83c\udf20 carter (@nic__carter) March 28, 2023<\/a><\/p>\n<\/blockquote>\n

\u201cRight now, none of the executives who ran these banks into the ground are barred from taking other banking jobs, none have had their compensation clawed back, none have paid any fines,\u201d explained Brown. \u201cSome executives have decamped to Hawaii. Others have already gone on to work for other banks. Some simply wandered off into the sunset.\u201d The chairman of the Senate Banking Committee revealed that he is preparing legislation that will enhance regulators\u2019 capacity to enforce fines and penalties, reclaim bonuses, and prohibit executives who are responsible for bank failures from ever working at another bank again.<\/p>\n

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wow.. Barr tells Senate Banking that SVB told regulators $100b was going to fly out the door on Friday\u2026 after $42b fled on Thursday, leading to the bank’s closure. If you don’t think we’re in a new world of potential hyper-speed bank runs, you’re not paying attention.<\/p>\n

\u2014 Steve Liesman (@steveliesman) March 28, 2023<\/a><\/p>\n<\/blockquote>\n

The FDIC chairman, Gruenberg, discussed the exposure to cryptocurrency businesses in connection to the bank failures. Gruenberg talked about how Silvergate Bank stated that it held \u201c$11.9 billion in digital asset-related deposits\u201d and had \u201cless than 10 percent of total deposits\u201d exposed to FTX. The chairman also mentioned the crypto asset clientele of Signature Bank, as well as the digital currency settlement systems of both Silvergate and Signature. Gruenberg noted that these banks held long Treasuries and were unprepared for the interest rate increases that followed the Covid-19 pandemic.<\/p>\n

\u201cA common thread between the collapse of Silvergate Bank and the failure of SVB was the accumulation of losses in the banks\u2019 securities portfolios,\u201d Gruenberg said.<\/p>\n

The chairman of the FDIC stated that the situations involving both Signature Bank and Silicon Valley Bank \u201cwarrant further extensive examination by both regulators and policymakers.\u201d Michael Barr of the Federal Reserve added that SVB\u2019s downfall was caused by its management\u2019s inability to cope with interest rate adjustments and a bank run. \u201cSVB failed because the bank\u2019s management did not effectively manage its interest rate and liquidity risk, and the bank then suffered a devastating and unexpected run by its uninsured depositors in a period of less than 24 hours,\u201d Barr emphasized.<\/p>\n

Barr stressed the importance of developing the current comprehension of banking \u201cin light of evolving technologies and emerging risks.\u201d He stated that the Federal Reserve was \u201canalyzing\u201d recent incidents and variables such as \u201ccustomer behavior, social media, concentrated and novel business models, rapid growth, deposit runs, interest rate risk, and other factors.\u201d The U.S. central bank representative added that, with all of these new and emerging variables, regulators must reconsider how they supervise and regulate financial institutions in the United States. \u201cAnd for how we think about financial stability,\u201d Barr concluded.<\/p>\n

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\nTags in this story
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bank executives<\/a>, bank failures<\/a>, Banking technology<\/a>, bonuses<\/a>, concentrated business models<\/a>, COVID-19<\/a>, crypto businesses<\/a>, customer behavior<\/a>, deposit runs<\/a>, Digital Assets<\/a>, Exposure<\/a>, FDIC<\/a>, Federal Reserve<\/a>, Financial Crisis<\/a>, Financial Institutions<\/a>, Financial Regulation<\/a>, financial stability<\/a>, fines<\/a>, Hawaii<\/a>, interest rate increases<\/a>, interest rate risk<\/a>, Legislation<\/a>, liquidity risk<\/a>, Martin Gruenberg<\/a>, Michael Barr<\/a>, Nellie Liang<\/a>, novel business models<\/a>, pandemic<\/a>, penalties<\/a>, rapid growth<\/a>, regulatory oversight<\/a>, regulatory response<\/a>, securities portfolios<\/a>, senate banking committee<\/a>, Sherrod Brown<\/a>, Signature Bank<\/a>, Silicon Valley Bank<\/a>, Silvergate Bank<\/a>, Social Media<\/a>, supervising financial institutions<\/a>, Tim Scott<\/a>, Treasury<\/a>, uninsured depositors<\/a><\/div>\n<\/div>\n

What do you think about the Senate Banking Committee hearing about the bank failures? Share your thoughts about this subject in the comments section below.<\/strong><\/em><\/p>\n

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\nJamie Redman <\/h6>\n

\nJamie Redman is the News Lead at Bitcoin.com News and a financial tech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open-source code, and decentralized applications. Since September 2015, Redman has written more than 6,000 articles for Bitcoin.com News about the disruptive protocols emerging today.

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

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