Former top executives of two failed banks will testify before Congress this month as lawmakers investigate what caused a series of collapses at midsize financial institutions.
The Senate Banking Committee said Tuesday it will hold a hearing on May 16 with former Silicon Valley Bank CEO Gregory Becker, as well as former Signature Bank chairman and co-founder Scott Shay and former Chairman Eric Howell.
The committee, chaired by Sen. Sherrod Brown, D-Ohio, will also hold two other hearings this month on the bank collapse. Several industry experts will testify at a hearing on Thursday. Then, on May 18, Michael Barr, the Federal Reserve’s top regulator, and Martin Gruenberg, president of the Federal Deposit Insurance Corporation, will testify.
The Fed board was the main regulator of Silicon Valley Bank in California, while the FDIC was the main federal regulator of Signature Bank in New York.
Barr issued a report last month that blamed the collapse of Silicon Valley Bank on mismanagement, watered-down regulations and lax oversight by Fed staff. He called on the industry to do a better job of policing on multiple fronts to avoid future bankruptcies.
A separate FDIC report said Signature Bank’s failure was likely due to the collapse of Silicon Valley Bank, but also found regulatory deficiencies at the FDIC, in particular, a lack of staff to adequately supervise the bank.
Senators have directed much anger at the banking industry, regulators and the reversal of financial stress tests in 2018. But between Democrats and Republicans in a deeply divided Congress, there is little agreement on whether any legislation is needed.
Brown, along with the top Republican on the Senate Banking Committee, Sen. Tim Scott, sent a letter in March to executives at Silicon Valley Bank and Signature Bank telling them they were expected to testify and warning that they “must answer for the bank’s downfall.” “.