Review Finds Fed Staff Should Have Known About Silicon Valley Bank Risks

A new review of the Silicon Valley Bank (SVB) collapse has found that Federal Reserve supervisory staff 'knew or should have known' about the institution’s vulnerabilities, according to Michelle Bowman, the Fed’s vice chair for supervision. The findings come from an initial report by an outside consulting firm, which examined the causes of the bank’s failure in early 2023. The report indicates that the Fed’s staff may have missed key warning signs prior to the collapse, which was the largest bank failure since the 2008 financial crisis. Bowman stated that the findings highlight the need for improved oversight and risk management practices within the Federal Reserve. The review is part of a broader effort to understand the factors that contributed to SVB's failure and to prevent similar incidents in the future. No specific details about the consulting firm’s recommendations or further actions have been disclosed at this time.