Democrats on the US House Financial Services Committee have introduced several bills in what they describe as the “first wave” of legislation aimed at tackling big bank failures.
In an announcement made on June 21, Maxine Waters, senior member of the committee, said that House Democrats had endorsed 11 bills written in response to the collapse of Silicon Valley Bank, Signature Bank and First Republic Bank in the United States. The proposed legislation – which has yet to go to the Republican committee members for approval – includes measures to impose fines and bar bank executives from working in the sector in the future if they “negligently contribute to the failure of their bank “.
“The failures of Silicon Valley Bank, Signature Bank and First Republic Bank make it clear that it is time for legislation to strengthen the safety and soundness of our banking system and enhance bank executive accountability,” said Representative Waters. “Congress should not sit idly by.”
MRI @RepMaxineWaters announces the introduction of a first wave of Cmte Democratic bills to respond to the recent failures of #SVB, #SignatureBank& #FirstRepublicBank, which were the 2nd, 3rd, & 4th largest bank failures in US history. | pic.twitter.com/Dhsn5ZiCMr
— US House Committee on Financial Services (@FSCDems) June 21, 2023
The House Committee, chaired by Republican Patrick McHenry, often discusses issues related to digital assets, including oversight of federal regulatory agencies like the Securities and Exchange Commission. Although some lawmakers have pointed out that digital assets contributed to the failures of Signature and Silicon Valley Bank, Rep. Waters did not specifically mention cryptocurrencies or blockchain in the proposed legislation. Nor did the lawmaker invoke crypto-friendly Silvergate Bank – which announced its voluntary liquidation in March – when introducing the bills.
Other measures included in the proposed bills could give regulators the authority to prohibit bank executives from selling shares in certain circumstances – as was the case with Silicon Valley Bank. and have regulators expand bank stress testing requirements. A bill suggested restricting the payment of bonuses to bank executives.
Rep. Waters said Republicans on the committee “were open” to some of the bills at the meeting, but it’s unclear which bills have any hope of moving forward with bipartisan support. Cointelegraph has reached out to the California representative, but has not received a response by press time.
Previously, Waters called for coordination and cooperation between government agencies and lawmakers in addressing cryptocurrency regulation. In February, he told Cointelegraph that he “remained optimistic” about the possibility of passing a stablecoin bill. Lawmakers reviewed a discussion draft of the bill as part of a hearing on digital assets on June 13.
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