Lawmakers Criticized Top US Bank Regulators for Their Incompetence in Overseeing Silicon Valley Bank and Signature Bank
A congressional hearing regarding the collapse of Silicon Valley Bank and Signature Bank has sparked criticism of top US bank regulators. Lawmakers questioned the regulators’ lack of action despite repeated warnings about the banks’ risks. The Federal Reserve Vice Chair Michael Barr agreed that regulators need to put in mitigations more promptly.
Lack of Transparency Regarding Regulators’ Emergency Meetings
The lack of transparency regarding regulators’ emergency meetings was brought up during the hearing. Members of the Republican majority challenged the decisions made by regulators, demanding raw, confidential supervisory information about the banks.
Senators Introduce Bipartisan Legislation to Require Bank Executives to Bear the Cost of Failure
Additionally, senators introduced bipartisan legislation to require bank executives to bear the cost of failure. Investor confidence was affected by the hearing, causing bank stocks to turn negative.
FDIC’s Handling of Silicon Valley Bank’s Collapse Criticized
The collapse of Silicon Valley Bank and the role of the FDIC in its resolution came under scrutiny during the same hearing. Republicans accused Biden’s administration of overstepping its bounds and interfering with the private market by handling SIlicon Valley Bank’s collapse. The resolution will impact the expansion of deposit insurance, which could lead to increased costs for consumers.
Questions Surrounding FDIC’s Decision on Uninsured Depositors
Questions have arisen surrounding the FDIC’s decision on uninsured depositors, which critics argue sets a dangerous precedent for future bailouts. The FDIC chief, Martin J. Gruenberg, is under scrutiny for his cautious approach towards selling Silicon Valley Bank to a private buyer.
Ro Khanna Discusses Banking Crisis and Regulation
Democrat Congressmember Ro Khanna of California joined Democracy Now! to discuss banking crisis and regulation. In his interview, Khanna criticized fellow Democrats who supported a 2018 bill that weakened Dodd-Frank, the landmark regulatory reform passed in the wake of the 2008 financial crisis.
Khanna believes that large regional banks need to be regulated the same way as Big Four banks. He emphasized the need to protect community banks to prevent power consolidation with Big Four banks. He suggests guaranteeing depositors in the country for at least the next year or two through mandatory fees for accounts over $250,000.
TikTok CEO Grilled by House Lawmakers
TikTok CEO Shou Zi Chew was grilled by House lawmakers on the app’s ties to the Chinese government, data practices, and effects on children’s mental health. The Biden administration demanded that TikTok be sold or face a national ban in the United States due to concerns about unwanted foreign access to US data and potential manipulation of the TikTok US ecosystem.
Democratic Congressmember Jamaal Bowman Defends TikTok
Democratic Congressmember Jamaal Bowman of New York defended TikTok and questioned the “hysteria” and “panic” around the app. He stated that it’s used by small business owners and everyday Americans for free speech.
Representative Ro Khanna acknowledged the need for broader social media reform to protect young kids and teenagers. Khanna also stated that TikTok has separate concerns, including evidence that the Chinese government has officials in the app and prioritized or deprioritized information about human rights and other sensitive issues. He believes that it’s an unnecessary risk to have the Chinese Communist Party have control in any way over ByteDance and TikTok.
Tension Between United States and China
The article also mentions tensions between the United States and China. Congressional visits to Taiwan, United States pledging weapons to Taiwan while President Biden draws a line in the sand regarding China’s support of Russia in the Ukraine war are also discussed.
The hearing highlights the need for stronger regulatory reform to prevent future banking crises. Additionally, transparency and accountability are necessary to ensure the public has trust in the system. The concerns about TikTok’s ties to the Chinese Government emphasize the need to protect US data and national interests.
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