US Democratic Senator Warren calls for an investigation into Federal Reserve Governor Bowman, alleging that her commissioning of the SVB collapse review may involve misuse of government resources.

Michelle Bowman, Vice Chair for Supervision at the Federal Reserve, has once again become embroiled in a political storm.

Democratic Senator Elizabeth Warren has sent a letter to the Federal Reserve Inspector General regarding Bowman’s commissioning of a consulting firm to launch a new investigation into the collapse of Silicon Valley Bank (SVB), requesting a formal investigation be initiated.

In her letter to Inspector General Michael Horowitz, Warren pointed out that two previous independent investigations have already determined that the deregulatory policies Bowman herself voted for were one of the key factors in SVB’s collapse.

She questioned whether Bowman’s newly commissioned investigation is a “wasteful fourth review of government resources,” warning that if its purpose is to circumvent or overturn previously established unfavorable conclusions, it could constitute misuse of government resources.

Bowman’s Policy Stance Directly Linked to SVB Investigation Findings

The core accusation in Warren’s letter targets the inherent connection between Bowman’s personal policy record and the findings of the SVB collapse investigation.

Previous reviews of the SVB collapse noted that related deregulatory measures weakened oversight of mid-sized banks, increased risk accumulation, and ultimately led to SVB’s sudden failure in March 2023. While serving as a Federal Reserve Governor, Bowman had voted in favor of these deregulatory policies.

Based on this, Warren believes that Bowman, because her policy actions were specifically spotlighted in previous investigations, is now leading a new round of inquiry in hopes of rewriting unfavorable official narratives. She characterizes this as potential misuse of government resources and calls for the Inspector General’s intervention.

Contract Award Process Also Under Scrutiny, Link to Former Vice Chair Noted

This commissioned investigation has also prompted procedural doubts. In her letter, Warren pointed out that the consulting contract was not awarded through a competitive bidding process, raising questions about procedural compliance.

Adding to the sensitivity, the consulting firm that received the contract has links to Bowman’s predecessor, former Federal Reserve Vice Chair for Supervision Randal Quarles. Warren believes this background further fuels concerns about the fairness and transparency of the contract award, and casts doubt on the independence of the whole commissioning process.

Warren asked Inspector General Horowitz to conduct a comprehensive investigation into the two issues above—namely, whether the motive for commissioning was legitimate, and whether the contract process was compliant.

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