Nellie Liang, undersecretary of the Treasury for internal finance, does not think that the digital information industry should be blamed for the transactions that led to the rapid collapse of Silicon Valley Bank (SVB) and Signature Bank earlier this month. “I don’t think cryptocurrencies had a direct impact on either bankruptcy,” Liang said at a session of the House Financial Services Committee on Wednesday.
When asked if digital assets were an indirect factor, he noted that Signature is particularly active in this industry, but did not go into further detail. Martin Gruenberg, Chairman of the Federal Deposit Insurance Corporation (FDIC), previously told senators that about one-fifth of Singapore’s deposit base was connected to crypto clients by the end of 2022. But this connection between the crypto industry and two of its old favorite banks didn’t catch the attention of members of the Senate and House of Representatives during the two-day sessions examining the failures of Silicon Valley and Signature.
Federal Reserve Supervisory Vice President Michael Barr, for example, said the problem with the SVB stemmed from “classical interest rate risk management.” The banking crisis erupted in the United States when Silicon Valley Bank (SVB) collapsed on March 10, 2023, after customers withdrew their money from the credit institution serving the technology sector. The bank was later taken over by US regulators. Central banks in different parts of the world took coordinated action on March 20, 2023 to increase the movement of the US dollar in the global financial system and to support major economies.