The House speaker said he spoke with Federal Reserve Chair Jerome Powell and Treasury Secretary Janet Yellen following the collapse of the bank.
House Speaker Kevin McCarthy, R-Calif., said Sunday that he’s “hopeful” federal officials will make an announcement on the collapse of Silicon Valley Bank before the market opens.
McCarthy said in an appearance on Fox News’ “Sunday Morning Futures” that he’s spoken with Federal Reserve Chair Jerome Powell and Treasury Secretary Janet Yellen after regulators shutdown SVB, one of the leading lenders to the tech sector.
“They do have the tools to handle the current situation, they do know the seriousness of this and they are working to try to come forward with some announcement before the markets open,” McCarthy said. “I’m hopeful that something can be announced today to move forward.”
McCarthy added that he thinks it is “very possible” to find a buyer for SVB, which he believes would be the “best outcome to move forward and cool the markets.”
SVB’s funds are currently in the hands of the Federal Deposit Insurance Corporation. All customers of SVB, a lender insured by the FDIC, had only up to $250,000 in money guaranteed by the federal government. The financial futures of those who banked more than that amount with SVB is uncertain.
Members of the California congressional delegation were briefed Saturday night by the FDIC on SVB, multiple offices in the House and Senate told NBC News.
Rep. Katie Porter, D-Calif., said rising interest rates were a factor behind SVB’s shutdown, along with the Covid-19 pandemic and “in some ways, the bank’s own management strategy.”
“There are real questions about why the bank didn’t anticipate one of the most fundamental financial facts that everybody should know, which is interest rates go up and they go down,” Porter said in an interview on MSNBC’s “The Sunday Show.”
“You can’t bet on them staying low forever,” she added. “They didn’t — they went up and the bank wasn’t prepared for and there are some real oversight questions about that.”
Porter said in a tweet on Saturday that she was working on legislation.
“The collapse of Silicon Valley Bank was totally avoidable,” she wrote. “In 2018, Wall Street pushed a deregulation bill that allowed banks like SVB to take reckless risks. It passed, even as I and many others warned of the risks. I am writing legislation to reverse that law, S. 2155.”
Rep. Ro Khanna, D-Calif., said that acquisitions would be “the ideal situation” and that the California delegation “made that clear” when speaking to the FDIC on Saturday night.
“That’s what we urged them to work on. They said they’re working on it. But to have that happen, you need FDIC and Treasury involved, because these assets are not liquid, and they may pay off 10 years from now,” Khanna said on CBS News’ “Face the Nation.” “I don’t think you’re gonna get a private seller without the Treasury Department and FDIC being actively engaged in helping liquidity with these treasury bonds. “
Plans are in the works for a briefing for members of the Senate Banking Committee this week, congressional aides told NBC News.
Staff on the Banking Committee were briefed in a call late Saturday night, and hearings looking into the matter are not off the table but haven’t been set, the aides said.
Treasury Secretary Janet Yellen said Sunday on CBS’ “Face the Nation” that there wouldn’t be a bailout. She added that the federal government is trying to figure out a way to help depositors.