{"id":84505,"date":"2023-11-14T15:35:29","date_gmt":"2023-11-14T20:35:29","guid":{"rendered":"https:\/\/ifintechworld.com\/markets\/crypto\/senate-banking-committee-discusses-accountability-oversight-of-financial-regulators-in-tuesday-hearing\/"},"modified":"2023-11-14T15:35:31","modified_gmt":"2023-11-14T20:35:31","slug":"senate-banking-committee-discusses-accountability-oversight-of-financial-regulators-in-tuesday-hearing","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=84505","title":{"rendered":"Senate Banking Committee Discusses Accountability, Oversight of Financial Regulators in Tuesday Hearing"},"content":{"rendered":"
\n

The Senate Committee on Banking, Houses, and Urban Affairs met on November 14th to conduct a hearing regarding oversight of financial regulators.<\/p>\n

Holding executives accountable<\/h2>\n

<\/span>
\u201cWe must turn the lessons of this year into action,\u201d said Senator Sherrod Brown (D \u2013 OH), Chairman of the U.S. Senate Committee on Banking, Housing, and Urban Affairs. \u201cIt means improving bank supervisions, it means holding bank executives accountable for risky behavior that does in fact sometimes drive their banks into the ground.\u201d<\/p>\n

Witnesses included Vice Chair for Supervision at the Federal Reserve, Michael Barr, Chair of the Federal Deposit Insurance Corporation, Martin Gruenberg, Chair of the National Credit Union Administration, Todd Harper, and Acting Comptroller at the Office of the Comptroller of the Currency, Michael Hsu.<\/p>\n

\u201cCongress must finish the job and pass our bipartisan RECOUP Act,\u201d Brown said, referencing the Recovering Executive Compensation Obtained from Unaccountable Practices Act (RECOUP) presented by the committee earlier this year with the aim \u201cto hold senior bank execs accountable when they gamble with customers money.\u201d<\/p>\n

Algorithmic lending\u2019s \u201cunintended consequences\u201d<\/h2>\n

<\/span>
The Senate hearing comes nearly two weeks after FTX founder, Sam Bankman-Fried, was found guilty in Manhattan federal court on seven charges including wire fraud, conspiracy to commit securities fraud, and conspiracy to commit money laundering.<\/p>\n

The attention surrounding Bankman-Fried\u2019s case has put a spotlight on the lack of regulation within the crypto sphere, with Bankman-Fried using a faulty automated risk engine to algorithmically liquidate risky positions on the exchange.<\/p>\n

In his testimony today, Federal Deposit Insurance Corporation (FDIC) Chair Martin Gruenberg made note of \u201cunintended consequences\u201d produced by algorithmic lending activity, claiming that it \u201cis the subject of supervisory attention in the course of our examination process.\u201d<\/p>\n

\u201cI think it\u2019s a growing issue and one we need to pay attention to,\u201d Gruenberg said.\u00a0<\/p>\n

\u201cA new kind of liquidity risk\u201d<\/h2>\n

<\/span>
Moreover, the hearing acknowledged concerns regarding the March 2023 collapse of Silicon Valley Bank, Signature Bank, and Silvergate Bank, of which FTX was a customer.<\/p>\n

\u201cWe learned how large depositors can withdraw those deposits at the push of a button and we\u2019ve also seen how social media can amplify concerns about institutions very quickly,\u201d said Gruenberg. \u201cI do think in a sense it\u2019s a new kind of liquidity risk that both the banks and the regulators need to pay attention to.\u201d<\/p>\n

The committee will conduct its annual banking oversight hearing on December 6th, 2023, with eight CEOs of the nation\u2019s largest banks, including JP Morgan Chase, Bank of America, Citigroup, and Morgan Stanley, among others participating.\u00a0<\/p>\n

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Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

The Senate Committee on Banking, Houses, and Urban Affairs met on November 14th to conduct a hearing regarding oversight of financial regulators. Holding executives accountable \u201cWe must turn the lessons of this year into action,\u201d said Senator Sherrod Brown (D \u2013 OH), Chairman of the U.S. Senate Committee on Banking, Housing, and Urban Affairs. \u201cIt […]<\/p>\n","protected":false},"author":1,"featured_media":84506,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[243],"tags":[83],"class_list":["post-84505","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-crypto","tag-featured"],"yoast_head":"\nSenate Banking Committee Discusses Accountability, Oversight of Financial Regulators in Tuesday Hearing | iFintechWorld<\/title>\n<meta name=\"description\" content=\"The Senate Committee on Banking, Houses, and Urban Affairs met on November 14th to conduct a hearing regarding oversight of financial regulators. 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