Tester, Tillis Call on President Biden to Appoint Independent Investigator to Probe Bank Failures

Senators: “It is imperative to have an honest and impartial assessment”;

“Self-reflection, while appreciated, is insufficient to ensure stressors to our financial system of this magnitude are not repeated”

Continuing their efforts to ensure bank executives and federal regulators are held accountable for recent bank failures, U.S. Senators Jon Tester (D-Mont.) and Thom Tillis (R-N.C.) today sent a letter pressing President Biden to appoint an independent investigator to further probe the relevant factors that led to the recent collapse of Silicon Valley Bank, First Republic Bank, and Signature Bank.

“We write to you today to express our continued concern regarding the recent failures in the United States banking system and the actions by federal and state-level financial regulators to review and assess these failures. Given the breadth of market impact and unanswered questions that still remain, we respectfully request that you appoint an independent investigator to further examine the facts and circumstances of these recent bank failures,” Tester and Tillis wrote. 

In their letter, Tester and Tillis stress that recent reviews conducted by federal regulators are insufficient and that an impartial examination is needed to hold both reckless bank executives and ineffective federal regulators accountable for their role in these recent bank failures.  

“[W]e believe it is imperative that an honest and impartial assessment is conducted to identify and examine the relevant factors that lead to this crisis,” wrote Tester and Tillis. “Though the regulatory agencies tasked with overseeing our financial institutions have released a series of internal reports examining causes, failures, and corrective measures, we believe an independent examination that covers the full jurisdictional scope of these failures, led by non-partisan experts, is critically important… Self-reflection, while appreciated, is insufficient to ensure stressors to our financial system of this magnitude are not repeated.”

The Senators concluded their letter by emphasizing that an independent investigation will help restore confidence in the American banking system and prevent future failures: “An outside, independent review of the supervisory and management errors that contributed to the failures would be a vital step toward restoring confidence in the banking system and preventing future failures. This thorough assessment will ultimately benefit taxpayers, policymakers, as well as regulators at the federal and state level and ensure well-run banks are not asked to once more make up for losses attributable to risky behavior by reckless executives and lackluster agency oversight.”

As members of the Senate Banking Committee, Tester and Tillis have led the charge to ensure bank executives and federal regulators are held accountable for recent bank failures.

Tester has led a letter to the Securities and Exchange Commission (SEC) calling for an investigation into Bank executives’ stock sales ahead of the collapse, sent a letter to FDIC Chairman Martin J. Gruenberg and Federal Reserve Chairman Jerome H. Powell urging federal financial regulators to use every tool at their disposal to claw back reported bonuses received by bank executives, and has repeatedly pressed officials on their failure to “drop the hammer” on bank management. 

You can read the Senators’ full letter HERE.