New review says Fed staff should have known Silicon Valley Bank was vulnerable

An outside review of the Federal Reserve’s supervision of Silicon Valley Bank has found that Fed staff “knew, or should have known” the bank was at risk before its 2023 collapse, according to Fed Vice Chair for Supervision Michelle Bowman. Bowman said the review, conducted by consulting firm Starling Advisory Group, found that SVB’s deposits were highly concentrated and about 94% uninsured. The bank’s customer base was heavily tied to venture capitalbacked technology companies, and its large holdings of U.S. Treasurys lost value as interest rates rose. The findings were released as the Fed was also facing renewed political pressure over its oversight of the bank failure. The White House criticized former Fed supervision chief Michael Barr, while Bowman said the new review will inform an overhaul of the Fed’s banksupervision practices. The full report has not yet been made public.