{"id":1937671,"date":"2023-05-25T06:25:22","date_gmt":"2023-05-25T10:25:22","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/rep-mcclain-rips-financial-regulators-for-svb-collapse\/"},"modified":"2023-05-25T06:29:01","modified_gmt":"2023-05-25T10:29:01","slug":"rep-mcclain-rips-financial-regulators-for-svb-collapse","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/rep-mcclain-rips-financial-regulators-for-svb-collapse\/","title":{"rendered":"McClain criticizes financial regulators over SVB failure."},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"&quot;\"><div class=\"counts mashsbcount\">14<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Frep-mcclain-rips-financial-regulators-for-svb-collapse%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1937671&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><h2>The Swift Demise of Silicon Valley Bank Raises Concerns About Oversight<\/h2>\n<blockquote>\n<div class=\"aplayer_app\" data-source=\"https:\/\/vs1.youmaker.com\/assets\/2023\/0525\/fef2c0be-f091-446d-b77d-49d0239c8dda\/audio.mp3?length=1802637&#038;duration=150\"><\/div>\n<p><span style=\"font-weight: 400;\">The swift demise of Silicon Valley Bank (SVB) has raised serious concerns about the bank\u2019s management and, more importantly, the failure of oversight. These issues were highlighted during Wednesday\u2019s hearing of the Oversight Subcommittee on Health Care and Financial Services, where Chairwoman Lisa McClain (R-Mich.) expressed her apprehensions.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">\u201cThe speed that it failed raised immediate concerns not only of poor management at the bank but of a failure of oversight,\u201d stated McClain. \u201c<span style=\"font-weight: 400;\">Evidence that has surfaced since has shown just that.\u201d<\/span><\/span><\/p>\n<p><span style=\"font-weight: 400;\">According to McClain, the reason behind SVB\u2019s collapse was straightforward, branding it \u201cone of the least complex bank failures in history.\u201d <\/span><\/p>\n<p><span style=\"font-weight: 400;\">She described a series of events that ultimately led to policies enacted by the late Trump and early Biden administrations, though she did not call out Trump by name.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">\u201cThe bank was invested in some of the safest securities available: U.S. treasuries and agency securities. The credit risk was minimal,\u201d the congresswoman said. \u201cThe only real risk to these securities is <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/president-trump-we-had-u-s-running-like-a-finely-tuned-watch-but-now-the-decisions-are-absolutely-horrendous\/\" title=\"President Trump: We had U.S. running like a finely-tuned watch, but now the decisions are absolutely horrendous\">high inflation rates<\/a>.\u201d<\/span><\/p>\n<p><span style=\"font-weight: 400;\">\u201cThen came the rampant inflation brought on by President Biden\u2019s unnecessary spending, injecting trillions into an economy already flush with cash. In response, the Fed spent months tightening to try to extinguish the rampant inflation.\u201d<\/span><\/p>\n<p><span style=\"font-weight: 400;\">It was the Fed\u2019s response that drove <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/5-reasons-making-taxpayers-pay-off-student-loans-is-a-rotten-idea\/\" title=\"5 Reasons Making Taxpayers Pay Off Student Loans Is A Rotten Idea\">interest rates<\/a> higher, exposing the risk contained on the SVB balance sheet. McClain also blamed the tech bank for not properly hedging against the rise in interest rates, given that they were signaled in advance by the Federal Reserve.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">She placed most of the blame on regulators, saying they did not provide enough oversight to ensure SVB was investing in interest rate hedges.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">\u201c<span style=\"font-weight: 400;\">Who was overseeing this bank? What were they focused on instead of risk management? And why didn\u2019t they intervene?\u201d<\/span><\/span><\/p>\n<p><span style=\"font-weight: 400;\">Some economists believe that more regulation is not the answer and\u2014in fact\u2014it is the U.S. government\u2019s ubiquitous role in <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/rep-mcclain-rips-financial-regulators-for-svb-collapse\/\" title=\"McClain criticizes financial regulators over SVB failure.\">determining private sector interest rates<\/a> that caused this problem to begin with.<\/span><\/p>\n<figure id=\"attachment_4979412\" style=\"width: 249px\" class=\"wp-caption alignright\"><a href=\"https:\/\/img.theepochtimes.com\/assets\/uploads\/2023\/01\/12\/Peter-Schiff_1615484154-GettyImages-1142462633-1200x800.jpg\"><figcaption class=\"wp-caption-text\"><noscript><\/noscript><\/figcaption><\/a> Economist Peter Schiff. (Courtesy of Peter Schiff)<\/figure>\n<p><span style=\"font-weight: 400;\">Founder and Chief Economist of Euro Pacific Asset Management Peter Schiff believes the Federal Reserve\u2019s presence is inherently distorting to the free market<\/span><\/p>\n<\/blockquote>\n<h3>What Went Wrong with Silicon Valley Bank?<\/h3>\n<p>Silicon Valley Bank&#8217;s collapse has raised serious concerns about the bank&#8217;s management and the failure of oversight. Chairwoman Lisa McClain expressed her apprehensions during a hearing of the Oversight Subcommittee on Health Care and Financial Services. According to McClain, the reason behind SVB&#8217;s collapse was straightforward, branding it &#8220;one of the least complex bank failures in history.&#8221; <\/p>\n<p>The bank was invested in some of the safest securities available: U.S. treasuries and agency securities. The credit risk was minimal. The only real risk to these securities is high inflation rates. Then came the rampant inflation brought on by President Biden&#8217;s unnecessary spending, injecting trillions into an economy already flush with cash. In response, the Fed spent months tightening to try to extinguish the rampant inflation. It was the Fed&#8217;s response that drove interest rates higher, exposing the risk contained on the SVB balance sheet. <\/p>\n<p>McClain also blamed the tech bank for not properly hedging against the rise in interest rates, given that they were signaled in advance by the Federal Reserve. She placed most of the blame on regulators, saying they did not provide enough oversight to ensure SVB was investing in interest rate hedges. Some economists believe that more regulation is not the answer and\u2014in fact\u2014it is the U.S. government&#8217;s ubiquitous role in determining private sector interest rates that caused this problem to begin with. <\/p>\n<p>Founder and Chief Economist of Euro Pacific Asset Management Peter Schiff believes the Federal Reserve&#8217;s presence is inherently distorting to the free market. Who was overseeing this bank? What were they focused on instead of risk management? And why didn&#8217;t they intervene? These are the questions that need to be answered to <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/fed-admits-fault-for-silicon-valley-bank-collapse-in-unflinching-report\/\" title=\"Fed Admits Fault for Silicon Valley Bank Collapse in \u2018Unflinching\u2019 Report\">prevent similar failures<\/a> in the future.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>concerns about SVB&#8217;s management and oversight. Chairwoman Lisa McClain (R-Mich.) expressed apprehensions during Wednesday&#8217;s hearing of the Oversight Subcommittee on Health Care and Financial Services.&#8221;<\/p>\n","protected":false},"author":602,"featured_media":1937672,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","fifu_image_alt":"","footnotes":""},"categories":[],"tags":[3763,5071,4263,27581,9830,21356],"class_list":["post-1937671","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","tag-criticizes","tag-failure","tag-financial","tag-mcclain","tag-regulators","tag-svb"],"fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1937671","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/602"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=1937671"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1937671\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/1937672"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=1937671"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=1937671"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=1937671"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}