Regulators have taken a lot of heat from both sides of the political aisle after the rapid failure of three U.S. banks—Silicon Valley Bank, Signature Bank and Silvergate Bank—this month. Massachusetts Sen. Elizabeth Warren, a democrat, argued regulators “clearly fell down on the job” at Silicon Valley Bank (SVB) in a Sunday CBS News interview and called for “accountability.” And South Carolina Sen. Tim Scott, a republican, echoed those comments at a Senate Banking Committee hearing Tuesday, saying that “by all accounts, our regulators appear to have been asleep at the wheel.”
On the other hand, Michael Barr, the Federal Reserve’s top banking regulator, told Congress Tuesday that SVB’s failure was the result of a “textbook case of mismanagement.” But Barr also admitted that “the events of the last few weeks raise questions about evolving risks and what more can and should be done” by regulators, adding that it’s critical “we fully address what went wrong.” He added that he’s considering strengthening banking regulations.
