A fact sheet from House Financial Services Committee Republicans provides an overview of the response as regulators move to protect deposits in the bank.
03/13/2023 2:45 P.M.
2 minute read
Regulators have closed Silicon Valley Bank (SVB) and Signature Bank in New York, prompting responses from Congress, particularly the House Financial Services Committee and Senate Committee on Banking, Housing and Urban Affairs.
“At this time, it is important to remain levelheaded and look at the facts—not speculation—when assessing the right path forward,” said U.S. Rep. Patrick McHenry, R-N.C., chair of the House Financial Services Committee. “I have confidence in our financial regulators and the protections already in place to ensure the safety and soundness of our financial system.”
The Federal Reserve, U.S. Department of the Treasury, and Federal Deposit Insurance Corporation (FDIC) announced actions to remedy effects of the closure, such as protecting deposits and other assets.
Regulators in New York also seized the regional Signature Bank, according to Yahoo Finance.
“The New York Department of Financial Services (DFS) has taken possession of Signature Bank, pursuant to Section 606 of New York Banking Law, in order to protect depositors,” according to a news release from the DFS.
The DFS appointed the FDIC as receiver of the bank.
“DFS is in close contact with all regulated entities in light of market events, monitoring market trends, and collaborating closely with other state and federal regulators to protect consumers, ensure the health of the entities we regulate, and preserve the stability of the global financial system,” it reports in the news release.
In Congress, House Financial Services Committee Republicans issued a fact sheet (PDF) with an overview of SVB’s collapse and next steps.
U.S. Rep. Maxine Waters, D-Calif., Ranking Member of the House Financial Services Committee, and U.S. Sen. Sherrod Brown, D-Ohio, chair of the Senate Committee on Banking, Housing, and Urban Affairs, released a statement after the Federal Reserve, Treasury Department and the FDIC announced new actions regarding SVB.
“We appreciate the U.S. Department of the Treasury, Federal Reserve, and Federal Deposit Insurance Corporation for coming together to address the Silicon Valley Bank and Signature Bank failures and protect the financial system. Today’s actions will enable workers to receive their paychecks and for small businesses to survive, while providing depository institutions with more liquidity options to weather the storm. As we work to better understand all of the factors that contributed to the events of the last several days and how to strengthen guardrails for the largest banks, we urge financial regulators to ensure the banking system remains stable, strong and resilient, and depositors’ money is safe. Americans should continue to be confident in their preferred financial institutions in their communities.”
According to a report in The Hill, the FDIC created a National Bank of Santa Clara to hold deposits and other assets of SVB, but the sudden closure is impacting tech firms’ deposits that ensure their employees get paid.
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