SVB collapse: Scott and Warren lead bipartisan call for new Fed watchdog

Senators Rick Scott (R-FL) and Elizabeth Warren (D-MA) are set to introduce a new legislation requiring an independent inspector general for the Federal Reserve and Consumer Financial Protection Bureau after the collapse of Silicon Valley Bank. In a letter to Fed Chairman Jerome Powell, Scott criticized the Fed for a lack of accountability.

Currently, the Fed already has an inspector general, but Scott and Warren believe that the role isn’t independent enough since the internal watchdog reports to the Fed board. At other big agencies, the inspector general reports to an independent auditor.

The proposal aims to create a presidentially appointed and Senate-confirmed inspector general who would oversee the Fed and the CFPB.

Warren said, “The recent bank collapses and regulatory failures by the Fed have underscored the urgent need for a truly independent Inspector General to hold Fed officials accountable for any lapses or wrongdoing.”

Warren and Sen. Bernie Sanders (I-VT) also sent a letter to Michael Barr, the vice chairman for supervision at the Fed, urging the central bank to crack down on large regional banks with assets between $100 billion and $250 billion.

Despite the collapse of Silicon Valley Bank, the Federal Open Market Committee is expected to revise its key overnight rate up by 0.25 percentage points to 4.75% to 5%, which would be the highest since 2007.

SVB COLLAPSE: INFLUENTIAL LAWMAKERS CALL TO LIFT $250,000 CAP ON FDIC DEPOSIT INSURANCE

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