Fed staff should have known Silicon Valley Bank was vulnerable, new report finds
Fed Vice Chair for Supervision Michelle Bowman said a new report indicates the central bank's staff missed signs ahead of Silicon Valley Bank's 2023 failure.
TL;DR
- An outside review found Fed staff knew or should have known Silicon Valley Bank (SVB) was vulnerable before its 2023 failure.
- The report's findings are escalating political tensions, with the White House pointing to Fed Governor Michael Barr.
- SVB's large holdings of U.S. Treasurys lost value as the Fed raised interest rates, leading to a run by customers with uninsured deposits.
- The review's findings contrast with a previous internal Fed review that suggested supervisors were overcautious.
- Political figures have criticized the report, with some suggesting it's an attempt to push for deregulation.
- Fed Vice Chair for Supervision Michelle Bowman announced the initial findings of the review by Starling Advisory Group.