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Sen. Elizabeth Warren on Sunday called for an investigation into the Federal Reserve System over weakened regulatory processes she said led Silicon Valley Bank and Signature Bank to implode.
The demand from the Massachusetts Democrat — who sits on the Senate banking committee — came as a new study found that nearly 200 other US banks were at risk of failing if depositors made a run on their holdings, because they hold large portions of their assets in interest-rate sensitive financial instruments like government bonds and mortgage backed securities.
SVB, the nation’s 16th largest bank, and Signature, had invested deposits in higher-yield, long-term mortgage-backed securities and bonds with pandemic-era low interest rates, only to see the value of the assets sink rapidly when the Fed hiked rates earlier this month.
“Let me describe what I see as the problem; starting back in 2016 or so, these multi-billion dollar banks like SBV … came to Washington and kept saying ‘lighten the regulations on us.
