The document is a key opening salvo as the Fed and other regulators consider how to improve their policing of financial risks.
Federal Reserve regulatory chief Michael Barr on Friday acknowledged that the central bank failed to properly oversee Silicon Valley Bank before its spectacular collapse — but placed some of the blame on his Trump-appointed predecessor.led by Barr, the Fed also faulted SVB’s leadership for allowing glaring problems to build up before the run on deposits last month that left the once-high-flying bank insolvent and shook the global financial system.
The document is the opening salvo in a renewed debate over bank regulation as the Fed and other agencies consider how to improve their policing of financial risks in the wake of banking industry turmoil. SVB and another regional lender, Signature Bank, failed after depositor runs during the same weekend in March, leading government officials to backstop all deposits for the two failed firms — even those not insured by the FDIC — in a bid to stem the panic.
“Politicizing bank failures does not serve our economy, financial system, or the American people well,” he said. That approach “contributed to delays and, in some cases, led staff not to take action,” according to the report.
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