Two senators on the Banking Committee say they have found flaws in regulators’ oversight reviews before some of the recent bank failures, and are asking President Joe Biden to appoint an independent investigator.

“Self-reflection, while appreciated, is insufficient to ensure stressors to our financial system of this magnitude are not repeated,” Jon Tester, a Montana Democrat, and Thom Tillis, a North Carolina Republican, wrote in a letter to Biden that was obtained by Bloomberg News.

“An outside, independent review of the supervisory and management errors that contributed to the failures would be a vital step toward restoring confidence in the banking system and preventing future failures,” the senators said.

Their call for an independent inquiry demonstrates lawmakers’ dissatisfaction with recent efforts by the Federal Reserve Bank and the Federal Deposit Insurance Corporation to examine their own shortcomings in the runup to the failures of Silicon Valley Bank and Signature Bank.

The letter comes hours before the Banking Committee hears from Michael Barr, the Fed’s vice chair for supervision; FDIC Chair Martin Gruenberg; and Michael Hsu, acting comptroller of the currency.

It will be senators’ first opportunity to publicly question Barr and Gruenberg since regulators conducted internal reviews after the failures of SVB and Signature but before the collapse of First Republic Bank.

Tester and Tillis urged any independent review by “non-partisan experts” to examine both federal and state regulators.

Also testifying on Thursday will be New York State Department of Financial Services Superintendent Adrienne Harris and California Department of Financial Protection & Innovation Commissioner Clothilde Hewlett.

Author: Zach C. Cohen