The Fed's Warnings Ignored: The Collapse of Silicon Valley Bank.
The Federal Reserve had been aware of Silicon Valley Bank's risky practices for over a year, but its warnings were insufficient to prevent the bank's collapse. The bank was using an incorrect model to assess its own risks amid rising interest rates and was flagged for deficiencies in risk management. Despite repeated warnings, the bank did not fix its vulnerabilities, and by early 2023, it was in a "horizontal review" that identified additional deficiencies. The bank's collapse has raised questions about bank oversight and the need for stricter regulations for big, but not huge, banks. The Fed has initiated an investigation into what went wrong with the bank's oversight, and the inquiry's results are expected to be publicly released by May 1.
- Before Collapse of Silicon Valley Bank, the Fed Spotted Big Problems The New York Times
- New audio of SVB head downplaying financial risk days before the bank's collapse ABC News
- Fed Raised Concerns About SVB's Risk Management in 2019 - WSJ The Wall Street Journal
- History Has a Warning for Jay Powell on How to Handle a Banking Crisis Bloomberg
- U.S. bank turmoil reflects blatant failure by the Fed, expert says Nikkei Asia
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