Sinema in Banking Committee Hearing: Recent Bank Failures Demonstrate Need to Address Shortcomings by Bank Executives and Regulators Alike

Jul 26, 2023

Sinema stressed need to hold federal banking regulators accountable to restore Americans’ confidence in banking system

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WASHINGTON – Arizona senior Senator Kyrsten Sinema questioned experts about the future of federal deposit insurance following recent banking failures in a Senate Banking Committee hearing. 
 
“I’m pleased this committee recently acted in a bipartisan way to hold failed bank executives accountable. I am also committed to holding federal banking regulators accountable: ensuring regulators fix cultural and operational deficiencies so that bureaucracy never gets in the way of doing their jobs and protecting the American people and hardworking taxpayers,” said Sinema, a member of the Senate Banking, Housing, and Urban Affairs Committee. 
 
Sinema expressed how recent bank failures, particularly the failure of Silicon Valley Bank, highlight the need to address shortcomings by bank managers and banking regulators. The committee discussed the future of federal deposit insurance after the Federal Deposit Insurance Corporation (FDIC) guaranteed uninsured deposits in the failures of Silicon Valley Bank (SVB) and Signature Bank.
 
The Senator questioned witnesses about a number of proposals that would impact federal deposit insurance to ensure bureaucracy does not restrict federal regulators from doing their jobs while restoring Americans’ confidence in the banking system. 
 
In May, Sinema demanded detailed answers and a plan from Michael Barr, Vice Chair for Supervision at the Federal Reserve, on how he plans to change the slow-moving, slow-acting culture in the organization. Inaction from the Federal Reserve, who was responsible for regulating and overseeing the now-defunct SVB, contributed to SVB’s failure.
 
Under questioning from Sinema, Barr pledged to be transparent and accountable about his promised cultural and operational changes at the Federal Reserve and to return with more specific plans on how he intends to transform the agency.