House Financial Services Committee Chair Patrick McHenry (R-N.C.) and Ranking Member Maxine Waters (D-Calif.) have urged the Government and Accountability Office (GAO) to undertake an examination of the causes which led to the closure of Silicon Valley Bank (SVB) and Signature Bank.
In their letter to the GAO, the committee leaders stated it was “critical” the committee understand, with the help of external evaluation and investigation by GAO, the events that led to the collapse of the two banks, including issues of bank mismanagement and failures; supervisory and examination failures; and the decisions or lack thereof in the days leading up to the collapse.
Specifically, the congressmembers requested the GAO investigate the reports of “questionable stock sales and bonus payments made days if not hours before the bank closed,” as well as questions about the role of investment bank underwriters, credit rating agencies, and the Federal Home Loan Bank system in the failing of these two banks.
The committee leaders requested the GAO find answers as to why the Federal Deposit Insurance Corp. (FDIC), which was made conservator of both banks upon their failures, was initially unable to find and secure a buyer for SVB.
The Congressmembers also asked the GAO to identify any other banking entities that may be facing a similar situation as SVB and Signature leading up to their closure, in “asset growth, deposit concentration, and maturity within their portfolios.”