A key official with the USTreasury said crypto isn't to blame -- despite some of the initial rhetoric -- for the failures of tech-oriented banks. jesseahamilton reports
Explore the policy fallout from the 2022 market crash, the advance of CBDCs and more.Nellie Liang, the U.S. Treasury Department's undersecretary for domestic finance, doesn’t believe that the digital assets sector should be blamed for the runs on Silicon Valley Bank and Signature Bank that led to their quick demise earlier this month.
But that relationship between the crypto industry and two of its one-time favorite banks has otherwise drawn scant attention from members of the Senate and House of Representatives over two days of hearings examining the failures of Silicon Valley and Signature. The two regional lenders – and a smaller institution, Silvergate Bank, that arguably sparked the recent blaze that spread through U.S. banking – took business risks that undermined their resilience, according to their regulators. Federal Reserve Vice Chairman for Supervision Michael Barr said the trouble with SVB, for instance, was rooted in “classic interest rate risk management.
However, lawmakers showed little interest in focusing on crypto questions in a long two days of congressional hearings. The hearings revealed the primary concerns of regulators and lawmakers dwelled onand potential failures in supervision from the Fed and FDIC. Discussion about potential new regulatory legislation targeted questions over the banking industry’s capital and liquidity cushions, not bills that might deal with crypto oversight.
Whatever the major causes of failure at the banks, though, the sudden absence of three of the leading crypto-friendly banks has left many virtual-assets customers
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