Hagerty Urges FDIC Inspector General to Investigate Failed Auction of Silicon Valley Bank

March 16, 2023

WASHINGTON—United States Senator Bill Hagerty (R-TN), a member of the Senate Banking Committee, today sent a letter to Tyler Smith, Acting Inspector General of the Federal Deposit Insurance Corporation (FDIC), imploring him to investigate the failure to find a buyer of Silicon Valley Bank (SVB) after it was taken into receivership.

“In light of recent reports, I write today to urge that you investigate whether the Federal Deposit Insurance Corporation’s Board of Directors and other employees complied with all legal responsibilities and duties, including those set forth in 12 U.S.C. § 1823, with respect to their actions concerning Silicon Valley Bank,” Hagerty wrote. 

“Ultimately, the systemic risk exception was invoked in SVB’s case, and I am concerned that FDIC directors or employees may have intentionally frustrated available methods of resolving SVB that both are required by law and would have resulted in lower costs to the taxpayer,” Hagerty continued. “The systemic risk exception is just that—an extraordinary exception to the normal resolution process—but it becomes the rule if officials are allowed to sidestep the required process of first considering less drastic and costly alternatives.  That is why investigating this matter is critical.”

“Given these concerning facts and the potentially enormous impacts on our economy, I request that you take all appropriate investigatory steps to determine what happened and whether any laws or duties were violated and report such findings to Congress in order to maximize transparency.  This sort of matter of significant public importance and taxpayer interest is exactly why the position of Inspector General was created, and ensuring that the FDIC is engaging in the appropriate process in resolving such important economic matters is vital,” Hagerty concluded.

A copy of the letter can be found here.

###