STATEMENT: Gottheimer Statement Pushing for House Bipartisan Investigation into Financial Regulators’ Failure to Properly Oversee Silicon Valley Bank

Mar 16, 2023

WASHINGTON, D.C. — Today, March 16, 2023, U.S. Congressman Josh Gottheimer (NJ-5), a member of the House Financial Services Committee, released the following statement:

“I am calling on House Financial Services Committee Chairman McHenry and Ranking Member Waters to conduct a comprehensive bipartisan investigation into financial regulators’ failure to properly oversee Silicon Valley Bank (SVB).

Under current U.S. law, the Federal Reserve has had the tools to identify many of the conditions that led to SVB’s collapse. In addition to clear oversight failures, the Federal Reserve did not apply basic safety and soundness standards nor heightened standards that could have been used to sound the alarm at SVB. The Federal Reserve could have applied more rigorous standards, allowed for in existing law, including annual stress tests and capital requirements accounting for unrealized gains and losses. For some reason, which we must understand, it chose not to. This enhanced supervision may have flagged SVB’s perilous asset mix, including its significant holdings of long-term treasuries. 

Now, we must make sure banking regulators are using their power to appropriately protect depositors at other institutions, and to deter runs on small, medium, and regional banks nationwide that do not suffer from the same management failures that plagued SVB. The failures of SVB’s management cannot cause a crisis of confidence in our banking system. In 2008, we had banks that were “too big to fail.” Today, we cannot encourage a system where banks are “too small to survive” and big banks are more concentrated.

It is concerning that the risk management failures of SVB did not catch the attention of state and federal regulators during routine examinations. Regulators failed to identify significant risk management issues at SVB that should have received scrutiny during the bank’s rapid growth. A high percentage of uninsured deposits, a significant mismatch in duration between assets and liabilities, a lack of client diversity, and the bank’s lack of a permanent Chief Risk Officer for nearly eight months should have been clear indications for banking regulators to take action.

We need to learn why the federal and state officials did not step in sooner, and instead let SVB grow rapidly while bank management made egregious failures to manage what should have been obvious risks.

The Federal Reserve is now conducting a review of its oversight of SVB, this action is too little, too late. Congress and federal regulators must take steps to backstop depositors, prevent contagion, and ensure proper oversight of our financial system to assure depositors at well-managed institutions that their funds are secure. We cannot end up in a situation where Americans only have access to the biggest banks.”


Recent Posts

Dec 4, 2023

RELEASE: Gottheimer Calls On Rutgers University to Protect Students and Remove Antisemitic, Anti-Israel Speakers From December 7 Event

NORTH JERSEY — Today, December 4, 2023, U.S. Congressman Josh Gottheimer (NJ-5) wrote to Rutgers University President Jonathan Holloway, calling on him to take action in response to the University’s inclusion of antisemitic, anti-Israel, and hate-filled upcoming guest speakers Marc Lamont Hill and Nick Estes at a Rutgers-sponsored event on December 7 entitled “Race, Liberation, and […]

Dec 4, 2023

RELEASE: Gottheimer, Lawler Stand with NYC Restaurant Owner Against NY’s $15/Day Congestion Tax

Above: Gottheimer with Rep. Lawler and Julio Pena, co-owner of NYC restaurant Il Posto Accanto. NEW YORK, NY — Today, December 4, 2023, U.S. Congressmen Josh Gottheimer (NJ-5) and Mike Lawler (NY-17) joined Julio Pena, owner of restaurant Il Posto Accanto, to highlight the terrible impact New York’s proposed $15-a-day Congestion Tax will have on small […]

Nov 30, 2023

RELEASE: Gottheimer Statement on New York’s Congestion Tax

NORTH JERSEY — Today, November 29, 2023, U.S. Congressman Josh Gottheimer (NJ-5) released the following statement: “As advertised, New York is officially sticking it to Jersey families with their commuter-crushing Congestion Tax. On top of the existing tolls, it’ll be 15 bucks every day to go into the city with no discounts at the GW Bridge […]