ASA to Congress: Where Was FSOC?
Highlights FSOC's failure to identify risks leading up to SVB collapse
WASHINGTON, D.C. – Today, the American Securities Association (ASA) issued a statement in advance of hearings being held this week by the U.S. Senate Committee on Banking, Housing, and Urban Affairs as well as the House Financial Services Committee to explore the events leading up to the collapse of Silicon Valley Bank (SVB).
The Financial Stability Oversight Council (FSOC) was established under the Dodd-Frank Act to identify risks to the financial stability of the United States, promote market discipline, and respond to emerging threats to the stability of the U.S. financial system.
“As the SVB debacle continues to inundate the news cycle, we raise one simple question, where was FSOC?” ASA CEO Chris Iacovella said. “The FSOC completely failed to warn the American people about actual risks in the banking system. Instead of including rising interest rates and their impact on asset prices as a top risk to banks, FSOC chose to identify risks dictated by politics. The FSOC’s only job is to identify risks and emerging threats to the stability of the U.S. financial system—its credibility depends on sticking to that mandate,” Iacovella said.
Additionally, ASA previously raised questions in an article for The Epoch Times about the systemic need to provide Chinese nationals and companies in China who were customers of SVB with a deposit guarantee over $250k.