Fed Oversight Report Finds Staff Should Have Known of Silicon Valley Bank's Vulnerability
A new review by Starling Advisory Group, announced by Fed Vice Chair Michelle Bowman on Friday, found that the Federal Reserve’s staff either knew or should have known about vulnerabilities at Silicon Valley Bank before its collapse in March 2023. The bank had sold securities at a $1.8 billion loss and faced significant exposure to rising interest rates, which devalued its large holdings of U.S. Treasuries. The report adds depth to an earlier review by then-Fed Vice Chair Michael Barr, who found the Fed's response was overcautious during the crisis. The new findings are likely to raise questions about Barr’s role in overseeing the bank before he stepped down from his supervisory position last year. President Donald Trump has criticized the Fed and may attempt to remove Barr from his current role as a board governor. The report highlights concerns around the Fed's regulatory oversight, particularly regarding banks with concentrated risk profiles like Silicon Valley Bank, which had 94 percent uninsured deposits largely held by venture capital-backed tech firms.
Topics: bank supervision Federal Reserve prudential regulators Silicon Valley Bank failure