Banking regulations need to be tougher, says Elizabeth Warren

Calling for an independent probe into Silicon Valley Bank (SVB) collapse, US Senator Elizabeth Warren on Sunday (March 19) said that banking regulations needed to be tougher. She took specific aim at the head of Federal Reserve Bank of San Francisco which was responsible for the oversight of SVB. Warren was speaking in an interview with ABC News.

During the interview, she said that the approach of “stepping in when these giant banks get into trouble” should change.

Democrat Warren sent a letter to the inspectors general of the US Treasury Department, the Federal Deposit Insurance Corp (FDIC) and the Federal Reserve on Sunday, urging regulators to examine the recent management and oversight of the banks which collapsed earlier this month.

California regulators shuttered Silicon Valley Bank on March 10 and appointed FDIC as receiver. It was the largest U.S. bank collapse since Washington Mutual went bust during the financial crisis of 2008. On Friday, the bank’s parent, SVB Financial Group, said it filed for Chapter 11 bankruptcy protection.

US prosecutors are investigating the SVB collapse, a source familiar with the matter told Reuters last week.

Financial stocks lost billions of dollars in value since Silicon Valley Bank and Signature Bank collapsed this month. President Joe Biden said on Friday the banking crisis has calmed down. He also promised Americans that their deposits are safe.

The inspectors general for the Treasury, Fed, and FDIC should deliver a preliminary report to Congress in 30 days, Warren said in her letter.

(With inputs from agencies)

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