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Fed staff should have known Silicon Valley Bank was vulnerable: report
CNBC • • business
Key Points:
- An outside review found that Federal Reserve staff "knew, or should have known" about Silicon Valley Bank's vulnerabilities before its 2023 failure, according to Fed Vice Chair for Supervision Michelle Bowman.
- The report has intensified political tensions, with the White House implicating Fed Governor Michael Barr, who was the Fed's top bank regulator during the crisis and is accused of failing to act adequately.
- The review contradicts Barr's earlier claim that regulatory changes following a 2018 law led to a less assertive supervisory approach, instead attributing delays in action to supervisory staff failures.
- Bowman is leading a major overhaul of the Fed's bank-oversight division, including a planned 30% reduction in staff, amid criticism and calls for accountability from both political parties.
- Senator Elizabeth Warren criticized the review as a misuse of taxpayer money and a potential pretext for deregulation that could increase risks of future banking failures.
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