US Senator Warren Calls for Probe into Fed Governor Bowman, Alleging Misuse of Public Funds in SVB Collapse Review

Democratic Senator Elizabeth Warren has formally requested an investigation into Federal Reserve Governor Michelle Bowman concerning a newly commissioned review of the Silicon Valley Bank (SVB) collapse. Warren has sent a letter to the Federal Reserve's Inspector General, alleging that the new review could represent an improper use of government resources, particularly as prior independent investigations have linked the bank's failure to deregulatory policies Bowman supported.

In her letter to Inspector General Michael Horowitz, Warren pointed out that two prior independent inquiries concluded that the deregulatory measures Bowman voted for as a Fed Governor were a significant factor in SVB's downfall. She characterized the newly commissioned review as a "fourth re-review" that wastes government resources.

Warren warned that if the purpose of this new review is to circumvent or overturn existing conclusions unfavorable to Bowman, it could constitute an abuse of government resources. The core of her accusation connects Bowman's policy record directly to the findings of the SVB investigations.

The previous reviews of the SVB collapse found that specific deregulatory actions weakened oversight of mid-sized banks, allowing risks to build and ultimately contributing to the bank's sudden failure in March 2023. Warren contends that Bowman, whose policy actions were cited in these earlier reports, may be initiating a new review to alter the official narrative.

Beyond the motive, Warren also raised procedural concerns. She noted that the consulting contract for this new review was not awarded through a competitive bidding process, questioning its compliance with standard procedures.

Adding to the controversy, the consulting firm awarded the contract has reported ties to Randal Quarles, Bowman's predecessor as the Fed's Vice Chair for Supervision. Warren suggested this connection further clouds the transparency and independence of the entire commissioning process.

In her letter, Senator Warren has asked Inspector General Horowitz to launch a full investigation into both the justification for the new review and the compliance of the contracting procedures used to award it.