The Justice Department and Securities and Exchange Commission will conduct reviews of last week’s failure of Silicon Valley Bank, The Wall Street Journal reported Tuesday, citing people familiar with the matter.
The development comes less than a day after the Federal Reserve said it would also review SVB’s collapse.
"We need to have humility, and conduct a careful and thorough review of how we supervised and regulated this firm, and what we should learn from this experience," the central bank’s vice chair for supervision, Michael Barr, said Monday.
Barr will lead the review, and the results will be publicly released by May 1, the Fed said Monday.
Fed Chair Jerome Powell said the events surrounding SVB’s collapse “demand a thorough, transparent and swift review” by the central bank.
Sen. Elizabeth Warren, D-MA, however, demanded that Powell recuse himself from the review, saying such a step is necessary "for the Fed's inquiry to have credibility” — and so Barr can have “the independence necessary to do his job,” CNBC reported Tuesday.
Powell’s "actions to allow big banks like Silicon Valley Bank to boost their profits by loading up on risk directly contributed to these bank failures," Warren said, according to the network.
The DOJ and SEC’s investigations, meanwhile, are in preliminary phases and will not necessarily lead to allegations of wrongdoing, The Wall Street Journal reported.
Spokespeople for the DOJ and SEC did not return a request for comment by press time.
"In times of increased volatility and uncertainty, we at the SEC are particularly focused on monitoring for market stability and identifying and prosecuting any form of misconduct that might threaten investors, capital formation or the markets more broadly,” SEC Chair Gary Gensler said Sunday. “Without speaking to any individual entity or person, we will investigate and bring enforcement actions if we find violations of the federal securities laws.”
President Joe Biden said Monday that customers who had deposits at Silicon Valley Bank and Signature Bank, which also failed last week, can “rest assured they’ll be protected and they’ll have access to their money.”
Investors and certain debt holders, however, would not be protected, Biden said — and bank management would be fired.
A Silicon Valley Bank spokesperson also did not respond to a request for comment Tuesday.