Top Fed Officials Criticize Silicon Valley Bank Executives at Senate Hearing

“Monday morning quarterbacking aimed only at the actions of regulators this month is as convenient as it is misplaced,” Senator Sherrod Brown, Democrat of Ohio, said at the start of the hearing.

Republicans also fired shots at bank managers, but said Fed supervisors were to blame for allowing problems to slip through the cracks.

“What were the supervisors thinking?” Senator Tim Scott, Republican of South Carolina, said during the hearing. He implied, with no evidence, that the San Francisco Fed might have overlooked risks at Silicon Valley Bank because they shared a focus on climate change.

Republicans and bank lobbying groups have tried to minimize the role that regulatory changes made during the Trump administration — which relaxed rules for midsize banks — played in Silicon Valley Bank’s demise. But Mr. Barr made it clear on Tuesday that the episode was likely to result in tougher oversight.

Randal K. Quarles, Mr. Barr’s predecessor, carried out a number of changes to bank oversight before stepping down in October 2021. Without the tweaks, Silicon Valley Bank would almost certainly have come under more intense scrutiny from Fed supervisors earlier.

Article source: https://www.nytimes.com/2023/03/28/business/economy/svb-banks-fed-hearing.html