London Daily

Focus on the big picture.
Friday, May 30, 2025

US Fed Reserve Admits To Own Failure In Identifying Startup Bank Troubles

US Fed Reserve Admits To Own Failure In Identifying Startup Bank Troubles

"Following Silicon Valley Bank's failure, we must strengthen the Federal Reserve's supervision and regulation based on what we have learned," Federal Reserve vice chair for supervision Michael Barr said in a statement accompanying the report.
The US Federal Reserve called for greater banking oversight while admitting to its own failures in a widely-anticipated report published Friday into the collapse of Silicon Valley Bank (SVB) last month.

"Following Silicon Valley Bank's failure, we must strengthen the Federal Reserve's supervision and regulation based on what we have learned," Federal Reserve vice chair for supervision Michael Barr said in a statement accompanying the report.

Michael Barr said SVB's management failed to adequately manage risk prior to the bank's swift collapse, while Fed supervisors failed to take forceful enough action after they had identified issues at the Californmian high-tech lender.

SVB's failure on March 10 after taking on too much interest-rate risk caused shock waves throughout the banking sector, and led to the failure of another regional US bank and the merger under pressure of Swiss investment banking giant Credit Suisse.

Concerted efforts by regulators on both sides of the Atlantic in the days that followed SVB's collapse appear to have reduced the banking turmoil and lowered volatility in the financial markets.

The report found that the Fed "did not appreciate the seriousness of critical deficiencies in the firm's governance, liquidity, and interest rate risk management," as SVB's assets more than doubled in size between 2019-2021 in the middle of a high-tech boom.

In response, Michael Barr said the Fed will look at strengthening banking supervision to ensure the Fed could more quickly identify risks and vulnerabilities.

The Fed will also look to strengthen the regulatory framework for banks, and consider toughening the rules around interest-rate risk, liquidity and capital requirements, and stress-testing.

The review will be far-reaching and look more broadly at the Fed's liquidity and capital rules, a senior Fed official told reporters prior to the report's release.

Fed chair Jerome Powell said in a statement that he welcomed Michael Barr's "self-critical" report into SVB's collapse.

"I agree with and support his recommendations to address our rules and supervisory practices, and I am confident they will lead to a stronger and more resilient banking system," he said.
Newsletter

Related Articles

0:00
0:00
Close
Satirical Sketch Sparks Political Spouse Feud in South Korea
Indonesia Quarry Collapse Leaves Multiple Dead and Missing
South Korean Election Video Pulled Amid Misogyny Outcry
Asian Economies Shift Away from US Dollar Amid Trade Tensions
Netflix Investigates Allegations of On-Set Mistreatment in K-Drama Production
US Defence Chief Reaffirms Strong Ties with Singapore Amid Regional Tensions
Vietnam Faces Strategic Dilemma Over China's Mekong River Projects
Malaysia's First AI Preacher Sparks Debate on Islamic Principles
White House Press Secretary Criticizes Harvard Funding, Advocates for Vocational Training
France to Implement Nationwide Smoking Ban in Outdoor Spaces Frequented by Children
Meta and Anduril Collaborate on AI-Driven Military Augmented Reality Systems
Russia's Fossil Fuel Revenues Approach €900 Billion Since Ukraine Invasion
U.S. Justice Department Reduces American Bar Association's Role in Judicial Nominations
U.S. Department of Energy Unveils 'Doudna' Supercomputer to Advance AI Research
U.S. SEC Dismisses Lawsuit Against Binance Amid Regulatory Shift
Alcohol Industry Faces Increased Scrutiny Amid Health Concerns
Italy Faces Population Decline Amid Youth Emigration
U.S. Goods Imports Plunge Nearly 20% Amid Tariff Disruptions
OpenAI Faces Competition from Cheaper AI Rivals
Foreign Tax Provision in U.S. Budget Bill Alarms Investors
Trump Accuses China of Violating Trade Agreement
Gerry Adams Wins Libel Case Against BBC
Russia Accuses Serbia of Supplying Arms to Ukraine
EU Central Bank Pushes to Replace US Dollar with Euro as World’s Main Currency
Chinese Woman Dies After Being Forced to Visit Bank Despite Critical Illness
President Trump Grants Full Pardons to Reality TV Stars Todd and Julie Chrisley
Texas Enacts App Store Accountability Act Mandating Age Verification
U.S. Health Secretary Ends Select COVID-19 Vaccine Recommendations
Vatican Calls for Sustainable Tourism in 2025 Message
Trump Warns Putin Is 'Playing with Fire' Amid Escalating Ukraine Conflict
India and Pakistan Engage Trump-Linked Lobbyists to Influence U.S. Policy
U.S. Halts New Student Visa Interviews Amid Enhanced Security Measures
Trump Administration Cancels $100 Million in Federal Contracts with Harvard
SpaceX Starship Test Flight Ends in Failure, Mars Mission Timeline Uncertain
King Charles Affirms Canadian Sovereignty Amid U.S. Statehood Pressure
Trump Threatens 25% Tariff on iPhones Amid Dispute with Apple CEO
Putin's Helicopter Reportedly Targeted by Ukrainian Drones
Liverpool Car Ramming Incident Leaves Multiple Injured
Australia Faces Immigration Debate Following Labor Party Victory
Iranian Revolutionary Guard Founder Warns Against Trusting Regime in Nuclear Talks
Macron Dismisses Viral Video of Wife's Gesture as Playful Banter
Cleveland Clinic Study Questions Effectiveness of Recent Flu Vaccine
Netanyahu Accuses Starmer of Siding with Hamas
Junior Doctors Threaten Strike Over 4% Pay Offer
Labour MPs Urge Chancellor to Tax Wealthy Over Cutting Welfare
Publication of UK Child Poverty Strategy Delayed Until Autumn
France Detains UK Fishing Vessel Amid Post-Brexit Tensions
Calls Grow to Resume Syrian Asylum Claims in UK
Nigel Farage Pledges to Reinstate Winter Fuel Payments
Boris and Carrie Johnson Welcome Daughter Poppy
×