U.S. Sen. Elizabeth Warren is calling upon watchdogs from multiple federal agencies to open an independent investigation into the collapses of Silicon Valley Bank and Signature Bank. Warren called for the probe in a letter she wrote to the inspectors general at the Department of Treasury, Federal Deposit Insurance Corporation, and the Board of Governors of the Federal Reserve.
In her letter, Warren stated that the Trump administration's weakening of the Dodd-Frank Wall Street Reform and Consumer Protection Act — a bill that was passed in order to prevent a repeat of the 2008 financial crisis — allowed banks like SVB and Signature to evade key rules and regulations.
"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," Warren wrote.
Warren also requested that the inspector general avoid any interference from Jerome Powell, chair of the Federal Reserve. The senator wrote that the federal reserve initiated key regulatory rollbacks under Powell, "who bears direct responsibility for – and has a long record of failure involving – regulatory and supervisory matters involving these two banks."
On Wednesday, Warren called on Powell to recuse himself from an internal probe on the collapse of Silicon Valley Bank. She said he has yet to respond to her request. Eugene Kiely, director of the nonprofit fact-checking website FactCheck.org, said he spoke with several banking experts who were split on pointing to one solid reason why the regional banks failed.
"There seem to be many different causes that were involved here," Kiely explained in an interview with Mark Albert, Hearst Television’s chief national investigative correspondent.
Warren is calling on the inspectors general to provide Congress and the public with a full, unredacted preliminary report on the findings of their investigation — including any recommendations — within 30 days.