The US Federal Reserve admits that it did not properly supervise the Silicon Valley bank despite knowing its weaknesses
There is a missing ‘in’ here:
This Friday is a statement
We repeat the entity:
For the entity, the entity
Watch out here:
Circumstances in which the bank failed
Those are two of the conclusions of the report on the Silicon Valley bank downfall that the Federal Reserve announced Friday in a statement acknowledging that supervisors did not take “sufficient steps” to ensure that The bank will solve his problems quickly when he discovered them.
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However, the Federal Reserve also decried it in its latest oversight of the entity He did not address 31 warnings That the supervisor sends is three times the average that financial institutions of this type receive.
The reasons for the collapse
The investigation into the causes of the bank’s collapse last March, led by the Federal Reserve’s Vice Chairman of Oversight, Michael S. Barr, also considers that This one is relaxed After approving the Economic Growth, Regulatory Relief, and Consumer Protection Act in effect since 2018.
He asserts that this regulation represented a turning point in “preventing effective oversight” of the government lower standardsIncreased complexity and enhanced “softer” monitoring than previous monitoring. After the fall of Silicon Valley Bank, We must strengthen supervision affiliate Federal Reserve “Organizing based on what we have learned,” Barr said in the statement.
“This review represents a first step in a process of self-assessment” and a look at the circumstances that led to the bank’s failure, “including the role the Fed played as supervisor and regulator,” he continued.
“Deeply self-critical report”
For his part, Federal Reserve Chairman Jerome Powell welcomed “this deep and self-critical report” and considered that his recommendations should be taken into consideration for their application to the rules and practices of the regulator. I am convinced that these recommendations will lead to A stronger banking system and flexible.”
As the Fed explained, the report analyzes “in detail” the way the bank is run and the oversight and regulatory issues surrounding its downfall. study slast supervision From the bank and includes more than twenty documents such as letters from the supervisor, test results and warnings.
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