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U.S. NEWS Thursday 30 March 2023
GOP lawmakers accuse Fed of being lax before bank failure

By PAUL WISEMAN process,” Himes said. “We
AP Economics Writer need to think about au-
WASHINGTON (AP) — Re- tomatic mechanisms that
publican lawmakers ac- when a finding of deficien-
cused top bank regulators cy is made... kick in.”
Wednesday of dawdling as Regulators have said that
Silicon Valley Bank hurtled Silicon Valley Bank, the
toward the second-largest go-to institution for Califor-
bank failure in U.S. history nia tech startups, was an
and questioned whether “idiosyncratic’’ case and
tougher regulations would that the overall U.S. bank-
have made a difference. ing system remains sound.
Regulators closed the bank Silicon Valley had made
March 10, shaking the U.S. a high-risk bet that inter-
financial system and trig- est rates would fall. When
gering fears of a broader they instead rose as the
banking crisis. But Federal Fed aggressively increased
Reserve supervisors had first its benchmark rate to fight
raised questions about Sili- inflation, the value of the
con Valley’s risky practices bank’s vast bond portfolio
far earlier — in 2021 — and plummeted.
had warned the bank’s News of its financial dis-
management about them tress led panicked large
in the fall of that year. Federal Deposit Insurance Corporation Board of Directors Chairman Martin Gruenberg, center, depositors to yank money
“That doesn’t sound like a accompanied by Federal Reserve Board of Governors Vice Chair for Supervision Michael Barr, left, out of the bank — a stun-
and Treasury Department Under Secretary for Domestic Finance Nellie Liang, right, testifies at a
very urgent supervisory pro- House Financial Services Committee hearing on recent bank failures, on Capitol Hill, Wednesday, ning $42 billion on March 9.
cess,” Rep. French Hill, an March 29, 2023, in Washington. Depositors were expected
Arkansas Republican, said Associated Press to withdraw an additional
at Wednesday’s hearing of $100 billion the next day.
the House Financial Servic- est regulations on all but had had “substantial dis- about enforcing the exist- In response, regulators in-
es Committee into the col- the very biggest banks — cretion” to deal with Silicon ing ones first?’’ tervened to take control
lapse of Silicon Valley Bank those with assets of more Valley Bank. Rep. Jim Himes, a Connect- of the bank and stop the
and of New York-based than $250 billion. The Fed is conducting its icut Democrat, also ques- bank run.
Signature Bank on March The 2018 law allowed the own review of its supervi- tioned Barr about the ap- The vast majority of Sili-
12. Signature Bank’s col- Fed to apply tougher over- sion of Silicon Valley Bank, parent lack of follow-up by con Valley Bank’s depos-
lapse was the third-biggest sight only on a case-by- due May 1. Barr said the re- Fed regulators once they its exceeded the federal
in the nation’s history. case basis of banks with view would, among other had rated Silicon Valley deposit insurance limit of
In response to the crisis, assets between $100 billion things, look into why Fed of- Bank’s management “de- $250,000. Worried that its
some Democrats are call- and $250 billion, a catego- ficials couldn’t compel the ficient” in July 2022. Himes failure would shake public
ing for stricter bank regu- ry that included both Sili- bank’s management to fix suggested that Congress faith in American banks, the
lations. Specifically, they con Valley Bank and Signa- the problems. consider requiring banks to federal government decid-
want to undo a law, cham- ture Bank. The Fed official Before enacting tough new respond to concerns raised ed to protect all deposits
pioned by the Trump ad- who oversees bank regula- regulations on banks, said by supervisors in a timely at Silicon Valley Bank and
ministration five years ago, tion, Michael Barr, agreed Rep. Blaine Luetkemeyer, a manner. Signature Bank, even those
that rolled back the strict- Wednesday that the Fed Missouri Republican, “How “We need to tighten up the exceeding $250,000.q

Congress to consider new no-fly list for

unruly passengers

By DAVID KOENIG The number of incidents in- side the Capitol Taylor said
AP Airlines Writer volving unruly passengers “Strong penalties are need-
U.S. Senate and House dropped sharply last year ed to curb violent and un-
members proposed a new after a judge struck down acceptable behavior. Bad
no-fly list for unruly passen- a federal requirement to behavior should not fly.”
gers on Wednesday, an wear masks on planes. Civil libertarians vowed to
idea that was pushed by However, incidents seri- oppose the measure. They
airline unions but failed to ous enough to be investi- say the FBI no-fly list is not
gain traction last year. gated by federal officials transparent and unfairly A Transportation Security Administration officer works at Dallas
The legislation would let remained more than five targets people of color, Love Field Airport on June 24, 2020, in Dallas.
the Transportation Security times higher than before and that the new list would Associated Press
Administration ban people the pandemic. have the same problems. look at forcing the airlines patrick, R-Penn.
convicted or fined for as- “The violent incidents have They also say that the Fed- to make flying a less miser- The lawmakers said the bill
saulting or interfering with not stopped,” said Cher eral Aviation Administration able experience,” said Jay includes guidelines for noti-
airline crew members. Taylor, a Frontier Airlines is cracking down on bad Stanley, a spokesman for fying people that they are
It would be separate from flight attendant who said behavior, and that reports the American Civil Liberties being placed on the list,
the current FBI-run no-fly list, she witnessed a passen- of unruly passengers are Union. and how to appeal. The
which is intended to pre- ger attack another in 2021 declining. The new measure was intro- bill would let TSA decide
vent people suspected of in Miami and walk away “If Congress wants to fur- duced by Sen. Jack Reed, how long a person would
terrorism ties from boarding before police arrived. At ther reduce air-rage inci- D-R.I., and Reps. Eric Swal- be banned from flying on
planes. a news conference out- dents on aircraft, it should well, D-Calif., and Brian Fitz- commercial planes.q