First Citizen to acquire SVB

In the wake of the recent collapse of the tech-focused financial institution Silicon Valley Bank (SVB), First Citizens has announced its acquisition of the failed bank. The collapse of SVB and Signature Bank marks the biggest banking crisis since 2008 and has prompted hearings from both the Senate and House to investigate federal regulators’ responses to these failures.

FDIC Chair Martin Gruenberg, OCC Comptroller Michael Barr, and Federal Reserve Vice Chair of Supervision Randal Quarles will testify before the Senate Banking, Housing and Urban Affairs Committee on Tuesday, and before the House Financial Services Committee on Wednesday.

The hearings come amid a push from President Joe Biden to increase federal oversight on senior banking executives in response to these bank failures. Biden has called on Congress to expand the government’s capacity to hold executives accountable and impose tougher penalties for bank failures. Democratic Senator Elizabeth Warren has been particularly vocal in her criticism of Federal Reserve Chair Jerome Powell, blaming him for the recent banking crisis.

While the FDIC, the Securities and Exchange Commission, and the Justice Department already have the authority to investigate the causes of these bank failures, lawmakers hope that the hearings will provide insights into how to prevent similar crises in the future. The collapse of SVB and the subsequent hearings also serve as a reminder of the need for stronger liquidity requirements, more robust stress testing, and routine resolution planning obligations in the banking industry.

In addition to the acquisition of SVB, the Biden administration has also announced that it will be returning political donations from Silicon Valley Bank executives.

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