On Friday, U.S. lawmakers convened to discuss the collapse of Silicon Valley Bank (SVB) with the Federal Reserve and Federal Deposit Insurance Corp. Meeting participants included Rep. Maxine Waters (D-Calif.), as well as officials from both federal bank regulators and the Treasury Department, shortly following California’s Department of Financial Protection and Innovation’s takeover of SVB. Representatives from both political parties expressed their worries about the bank’s collapse, and Waters voiced her own concern.
I am deeply troubled by the collapse of Silicon Valley Bank, the second largest bank failure in U.S. history. I am closely monitoring and engaging with the relevant regulators to ensure that my colleagues and I have a comprehensive understanding of the closure of Silicon Valley Bank (SVB) by the California Department of Financial Protection and Innovation (DFPI) and the Federal Deposit Insurance Corporation (FDIC) being appointed as receiver. I thank DFPI and FDIC for their swift action today and have faith in America’s financial system and its regulators to protect consumers and investors alike.”
Congresswoman Waters in a statement.
Several California legislators also posted on social media that they were closely monitoring the situation. One of the main worries is whether depositors with funds exceeding FDIC’s $250,000 per account limit will be compensated for their losses. In response, the FDIC said it will offer uninsured depositors an advance dividend and receivership certificate.
Congressional representatives from California, Rep. Eric Swalwell, and Rep. Ro Khanna, have expressed concern about the collapse of Silicon Valley Bank (SVB) and its potential impact on businesses that banked with them. In a tweet, Rep. Swalwell asserted that it was necessary to ensure deposits exceeding the FDIC’s $250K limit were honored, as banking is about confidence. Rep. Khanna reported that he spoke to the White House and Treasury Department about SVB, and Secretary Yellen expressed her full confidence in the banking regulators to take appropriate action. She also noted that the banking system remains resilient and has effective tools to address such events.
