Treasury Under Secretary Nellie Liang: Crypto Had No Direct Role in Bank Crash
Nellie Liang, the US Treasury Department’s Undersecretary for Domestic Finance, does not think that the digital asset sector is to blame for the quick collapse of Silicon Valley Bank (SVB) and Signature Bank last month.
During a hearing of the House Financial Services Committee on Wednesday, she stated:
“I don’t believe that crypto played a direct role in either of the failures.”
When asked if the sector was an indirect factor, Liang noted that Signature was especially active in the industry. Federal Deposit Insurance Corp. (FDIC) Chairman Martin Gruenberg had earlier informed the lawmakers that around one-fifth of Signature’s deposits were connected to crypto customers at the end of 2022.
However, the connection between the crypto field and the two former favored banks has not been given much attention by members of the Senate and House of Representatives during two days of hearings focusing on the failures of Silicon Valley and Signature.
The two regional financial institutions – and a smaller one, Silvergate Bank, which possibly sparked the recent blaze that swept through US banking – had taken on business risks that weakened their resistance, according to their regulators.
