California regulators shuttered Silicon Valley Bank on March
10 and appointed FDIC as receiver. It was the largest U.S. bank
collapse since Washington Mutual went bust during the financial
crisis of 2008. On Friday, the bank's parent, SVB Financial
Group , said it filed for Chapter 11 bankruptcy
protection.
U.S. prosecutors are investigating the SVB collapse, a
source familiar with the matter told Reuters last week.
Warren also said on Sunday she does not have faith in San
Francisco Federal Reserve President Mary Daly in the wake of
SVB's collapse.
"No, I do not," Warren said on CBS's "Face the Nation" when
asked if she has faith in Daly.
Financial stocks lost billions of dollars in value since
Silicon Valley Bank and Signature Bank collapsed this month.
President Joe Biden said on Friday the banking crisis has calmed
down. He also promised Americans that their deposits are safe.
The inspectors general for the Treasury, Fed, and FDIC
should deliver a preliminary report to Congress in 30 days,
Warren said in her letter.
"The bank's executives, who took unnecessary risks or failed
to hedge against entirely foreseeable threats, must be held
accountable for these failures. But this mismanagement was
allowed to occur because of a series of failures by lawmakers
and regulators," she wrote in the letter.
She also criticized Federal Reserve Chair Jerome Powell in
her CBS interview.
"Remember the Federal Reserve Bank and Jerome Powell are
ultimately responsible for the oversight and supervision of
these banks. And they have made clear that they think their job
is to lighten regulations on these banks. We've now seen the
consequences," Warren said.
(Reporting by Kanishka Singh in Washington and Rishabh Jaiswal
in Bengaluru
Editing by Frances Kerry and Matthew Lewis)
(Adds details of Warren's letter, comments by Warren in TV
interview)
By Kanishka Singh and Rishabh Jaiswal
WASHINGTON, March 19 (Reuters) - U.S. Senator Elizabeth
Warren on Sunday called for an independent probe into the recent
failures of Silicon Valley Bank and Signature Bank and
took specific aim at the head of the Federal Reserve Bank of San
Francisco responsible for oversight of SVB.
Democrat Warren, who is pushing for tighter banking
regulations, sent a letter to the inspectors general of the U.S.
Treasury Department, the Federal Deposit Insurance Corp (FDIC)
and the Federal Reserve on Sunday, urging regulators to examine
the recent management and oversight of the banks which collapsed
earlier this month.
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