US Senate Orders Regulatory Audit Related to SVB Bankruptcy

Investigations into the responsibility of regulatory authorities are expected to take place regarding the bankruptcies of Silicon Valley Bank (SVB) and Signature Bank in the United States.

U.S. Senator Elizabeth Warren (center)
[Image source=Yonhap News]

The Wall Street Journal (WSJ) reported on the 19th (local time) that the U.S. Senate has instructed the offices of inspectors general of regulatory agencies to investigate the management and supervision of the recently collapsed banks.

Senator Elizabeth Warren (Democrat) sent a letter on the same day to the offices of inspectors general of the U.S. Department of the Treasury, the Federal Deposit Insurance Corporation (FDIC), and the Federal Reserve (Fed), requesting such an investigation.

Warren, a member of the U.S. Senate Banking Committee, stated, "The executives of these banks, who took unnecessary risks or failed to prepare for threats that were entirely foreseeable, must be held accountable for this failure," but added, "Such mismanagement could have resulted from failures by the legislature and regulatory authorities."

WSJ reported that Warren has required preliminary results of this investigation to be submitted within 30 days. Warren has continuously advocated for stronger bank regulations, warning against a recurrence of the financial recklessness that triggered the global financial crisis from 2007 to 2009.

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