In 1982, after Oklahoma’s Penn Square Bank failed, Republican Rep. Ed Weber of Ohio scolded regulators during a hearing, calling the collapse “an indictment of the regulatory system.” But officials at the Comptroller of the Currency, which was responsible for auditing Penn Square, fired back, blaming fellow regulators and the bank’s management for relying on high-risk energy loans.
Sound familiar? Last month, following the collapse of Silicon Valley Bank (SVB) and Signature Bank, Republican Sen. Tim Scott of South Carolina told regulators at a hearing that they “appear to have been asleep at the wheel” before banks’ recent issues. And regulators? They blamed bank executives, with the Federal Reserve’s vice chair for supervision, Michael S. Barr, telling the Senate that SVB’s collapse was a “textbook case of mismanagement.”
