Expert says SVB had red flags, expects Congress probe

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STORY: U.S. authorities launched emergency measures on Sunday to shore up confidence in the banking system after the failure of Silicon Valley Bank threatened to trigger a broader financial crisis.

The move will not lead to losses by American taxpayers and all depositors, including those whose funds exceed the maximum government-insured level, will be made whole, according to a joint statement by U.S. Treasury Secretary Janet Yellen, Federal Reserve Chair Jerome Powell and Federal Deposit Insurance Corp Chair Martin Gruenberg on Sunday (March 12) even

The moves reassured financial markets, sending stock indexes up in early Asia trading, but left questions unanswered about buyers for the banks, and left equity and bondholders of the two failed institutions with steep losses.

Gerard Comizio, a professor at American University Washington College of Law, told Reuters that the FDIC is 'going to have to be ready to open up the pocketbook'. He added that there will be 'blowback' from this fallout.

"The idea that you had two bank failures, including one that is the second largest bank failure in history, there's going to be some blowback from this and I fully expect that there'll be congressional hearings on these failures, both of them," Professor Comizio said referring to the SVB fallout and the crypto-friendly bank Silvergate that recently shut down.

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