Federal Reserve Chairman Jerome Powell should be very cautious when deciding to raise interest rates or he risks another bank crisis, Rep. John Garamendi (D-Calif. 8th District) told Cheddar News.
"The Federal Reserve has a specific part of the responsibility here with its very rapid increase in interest rates to fight inflation going forward," he said. "The chairman of the Federal Reserve better be very, very careful here."
"He could seriously set off another bank crisis," added Rep. Garamendi, one of the first lawmakers briefed on Silicon Valley Bank's collapse.
The federal government deployed emergency measures after two banks collapsed over the weekend, by guaranteeing all deposits at the two institutions: Silicon Valley Bank and Signature Bank.
Following the failures, the Justice Department and the Securities and Exchange Commission opened investigations into Silicon Valley Bank, the Wall Street Journal reported on Tuesday morning.
"The investigation surely should look at what happened. Why did the company collapse?" Garamendi said. "And then we must take appropriate legislative action to add whatever regulatory requirements might be necessary."
"All banks should be subject to very significant and thorough regulatory review," he continued. "The Dodd-Frank legislation was put in place so that all banks, large and small and huge, would all have very strict regulatory requirements."
The Dodd-Frank Act was partially repealed in 2018, exempting smaller and mid-sized banks from complying with stress tests. Republicans, including House Financial Services Committee Chair Patrick McHenry, have since argued against more regulations.
"I have confidence in our financial regulators and the protections already in place to ensure the safety and soundness of our financial system," Rep. McHenry (R-N.C. 10th District) said in a statement.
Instead, some members of the GOP blamed President Biden's fiscal policies for the collapse, along with rising interest rates and poor management.
However, Garamendi, who represents northern California, included the Federal Reserve as partly to blame for Silicon Valley Bank's collapse.
"The Federal Reserve and its very rapid increase in interest rates was one of the reasons why this bank failed," he stated. "The Fed needs to understand what it means when they rapidly raise interest rates."
The Federal Reserve is set to decide whether to raise interest rates again on March 22.
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Spain's government has fined Airbnb 64 million euros or $75 million for advertising unlicensed tourist rentals. The consumer rights ministry announced the fine on Monday. The ministry stated that many listings lacked proper license numbers or included incorrect information. The move is part of Spain's ongoing efforts to regulate short-term rental companies amid a housing affordability crisis especially in popular urban areas. The ministry ordered Airbnb in May to remove around 65,000 listings for similar violations. The government's consumer rights minister emphasized the impact on families struggling with housing. Airbnb said it plans to challenge the fine in court.
Roomba maker iRobot has filed for Chapter 11 bankruptcy protection, but says that it doesn’t expect any disruptions to devices as the more than 30-year-old company is taken private under a restructuring process. iRobot said that it is being acquired by Picea through a court-supervised process. Picea is the company's primary contract manufacturer. The Bedford, Massachusetts-based anticipates completing the prepackaged chapter 11 process by February.
Serbia’s prosecutor for organized crime has charged a government minister and three others with abuse of position and falsifying of documents related to a luxury real estate project linked to U.S. President Donald Trump’s son-in-law Jared Kushner. The charges came on Monday. The investigation centers on a controversy over a a bombed-out military complex in central Belgrade that was a protected cultural heritage zone but that is facing redevelopment as a luxury compound by a company linked to Kushner. The $500 million proposal to build a high-rise hotel, offices and shops at the site has met fierce opposition from experts at home and abroad. Selakovic and others allegedly illegally lifted the protection status for the site by falsifying documentation.
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A rare magnum of Dom Pérignon Vintage 1961 champagne that was specially produced for the 1981 wedding of Prince Charles and Lady Diana has failed to sell during an auction. Danish auction house Bruun Rasmussen handled the bidding Thursday. The auction's house website lists the bottle as not sold. It was expected to fetch up to around $93,000. It is one of 12 bottles made to celebrate the royal wedding. Little was revealed about the seller. The auction house says the bids did not receive the desired minimum price.
