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Federal Oversight Could Have Prevented Bank Failures Capitol Comments
Senator Robert Menendez
WASHINGTON, D.C. – U.S. Senator Bob Menendez (D-N.J.), a senior member of the U.S. Senate Committee on Banking, Housing, and Urban Affairs, pressed federal financial regulators during an oversight hearing on their efforts to ensure greater executive accountability and effective supervision in the wake of recent bank failures.
The Senator noted that Michael Barr, the Federal Reserve Vice Chair for Supervision, identified in his recent report major weaknesses in Silicon Valley Bank’s incentive compensation program, noting that it encouraged excessive risk taking to maximize short-term financial metrics and did not adequately reflect longer-term performance, nonfinancial risks, or unaddressed audit or supervisory issues.
“As I noted in our hearing with the executives...the incentive structure SVB put in place rewarded breakneck growth and profitability, while kneecapping efforts to manage growing risks to the firm,” said Sen. Menendez.
The Senator pointed out that financial regulators have been slow to develop and swiftly implement a strong incentive-based compensation rule – a rule that is required under Dodd-Frank and is now more than 10 years overdue – that could have helped in preventing the situation we saw at SVB.
“I have a sense, having sat through the Great Recession, almost the financial collapse, listening to all we were asked to do as members of the Banking Committee back then. When we pass things, we seem to get it vetoed by omission,” added Sen. Menendez. “Which means maybe the regulators don’t like what we say, but it’s the law. And then nothing happens. A decade – a decade! At some point, gentlemen, you have responsibility. So, I hope you’ll get to that quickly.”
The Senator also highlighted how Vice Chair Barr’s report on the supervision of SVB revealed that Fed examiners gave the bank’s management satisfactory ratings even after supervisors began identifying and communicating issues with governance and risk management in 2018. The Federal Reserve continued awarding management satisfactory ratings despite identifying significant concerns year after year. He questioned why regulators appear reluctant to downgrade bank ratings to reflect their performance.
“To me, this shows that Fed examiners fundamentally misunderstood their role in enforcing a safe and sound banking system,” concluded Sen. Menendez. “Your job is to identify risks proactively and ensure they are fixed before they impact performance, since we’ve seen time and again that the banks themselves do a poor job of it.”
At the end of his line of questioning, Sen. Menendez secured commitments from Vice Chair Barr to sharpen the focus of the Federal Reserve’s supervisory efforts in order to proactively identify and ensure banks fix vulnerabilities.
In late March, Sen. Menendez led a bipartisan group of Senate Banking colleagues in pressing Federal Reserve Chair Jerome Powell on the agency’s use of enhanced supervision and prudential standards for SVB. He also signed a letter led by Chair Sherrod Brown to Securities and Exchange Commission (SEC) Chair Gensler requesting prompt examinations of Silicon Valley Bank’s purportedly selling millions of dollars’ worth of company stock in the days and months leading up to SVB’s failure.
In response to the recent bank failures, Sen. Menendez joined dozens of Senate and House colleagues to introduce the Secure Viable Banking Act, legislation that would repeal Title IV of S.2155, the Economic Growth, Regulatory Relief, and Consumer Protection Act of 2018, and increase prudential standards for banks similar to Silicon Valley Bank and Signature Bank. Sen. Menendez is a longtime advocate for prudent financial regulation, and was outspoken about the dangers of passing S.2155 five years ago, which reduced critical oversight and capital requirements for large banks.
Whiting Assembly of God
A Bible-believing & Christ-centered Church
83 Lacey Road (Rt. 530)
Sunday 10:00 am
Children’s Church Available
Tuesday Bible Study 1:30 pm
Wednesday 2:00 pm
732-350-4000
Pastor Todd Huff whitingassemblyofgod.org
Sunday Worship Services of Holy Communion at 10 a.m. &Wednesday spoken Holy Communion at 9 a.m. Christ Lutheran Church
The Rev. Dr. J. Francis Watson, Pastor 40 Schoolhouse Road, Whiting, NJ 08759
Phone 732.350.0900 • Fax 732.350.0343
E-mail: christlutheranchurch2@verizon.net
Website: christlutheranwhiting.com
Manchester PAL 2023 Fishing Derby
MANCHESTER – The Manchester Township Police Athletic League has set June 3 as the 18th Annual Kids Fishing Derby date. The Derby will run from 8:30 a.m. to 12:30 p.m. This event will be held at Pine Lake in the Pine Lake Park section of Manchester Township.
The past Derbies have proven to be a tremendous success due to the support of the Mayor, Township Council, Manchester Police, Public Works and Recreation Department. Volunteers and generous donations from local businesses have made this a great day for our community. The Ocean County Federation of Sportsmen’s Clubs is supports the Derby as well.
They will also be registering this event with NJDEP Division of Fish and Wildlife,
HOFNOD’s 8th Annual Youth Fishing Challenge. The Division of Fish and Wildlife supports all those organizations participating in the Event by providing program materials and prizes for the children. The Derby sends an educational anti-drug and alcohol abuse message as well as fishing education and fun.
Travel Bocce Club Presents Branson Show Extravaganza
WHITING – Travel Bocce Club Presents Branson Show Extravaganza: Nine days, eight nights; December 2 to 10. Double: $1,170; Single: $1,455.
Board
Incredible price includes: Motor coach transportation; eight nights lodging including four consecutive nights in Branson area;14 meals: eight breakfasts and six dinners; admission to six fabulous shows including: three morning shows: Dublin’s Irish Tenors with special guests The Celtic Ladies, Down Home Country & A Neil Diamond tribute show; two evening
This event is for children up to 15 years of age and must be accompanied by an adult. Free food and prizes will be given to participants. There is no fee charged to attend this event. Children must bring their own fishing equipment. Bait will be provided. Preregister by sending your child(ren)’s name and age, as well as the guardians name to: Manchester Pal, PO Box 487 Lakehurst, NJ 08733. shows:
Baldknobbers show & Queen Ester show at Sight & Sound; one afternoon show: Dean Z - The Ultimate Elvis Show; Admission to Titanic: The World’s Largest Museum Attraction.
$75 due upon signing per person. Purchase tickets every Tuesday from 10 a.m. to 12 p.m. at Village 5 Clubhouse 325 Schoolhouse Road, Whiting. Call Debbie at 201618-8514 for more information. Sign up early to prevent cancellation of trip. Final payment due by September 25.
Resident Club Village 5 Karaoke
WHITING – Resident Club Village 5 Present Karaoke with “Howie” on June 30 from 7 to 11 p.m. Cost is $5 per person and includes snacks, soda, bottled water. All are welcome!
Come on out and bring and bring your friends! Tickets can be purchased every Tuesday from 10 a.m. till 12 p.m. at Village 5, 325 Schoolhouse Road. Call Debbie at 201-618-8514 for more information.
Manchester Day
MANCHESTER – Mark your calendars!
The event will kick off at 2 p.m at Harry Wright Lake on June 24. Join for a fun filled day with vendors, live entertainment featuring “Yacht Rock Gold” and “Step - pin’ Out,” games, prizes, free swimming and fireworks in the evening! Free shuttle service schedule is available from the municipal parking lot, Bowker Field parking lot and senior villages (main club house).
Manchester Recreation Farmers’ Market
MANCHESTER – Manchester Recreation
Farmers’ Market has opened for the season!
The market will be held at Manchester Town Hall, 1 Colonial Drive, Thursdays until July 27 from 10 a.m. to 2 p.m. For more information, contact Manchester Recreation ay 732-657-8121 ext. 5102 or email recreation@manchestertwp.com.
