The scope of blame for Silicon Valley Bank's failure stretches across bank executives, Federal Reserve supervisors and other regulators, the banking system's top cop on Wednesday told U.S. lawmakers demanding answers for the lender's swift collapse.
Depositors tried to pull more than $42 billion in a single day at SVB in early March, surprising regulators and kicking off deposit flight across"That's just an extraordinary scale and speed of a run that I had not ever seen," Barr said.
Representatives from both political parties pressed Barr, Martin Gruenberg, head of the Federal Deposit Insurance Corp, and Treasury undersecretary for domestic finance Nellie Liang on why regulators did not act more forcefully, given Fed supervisors had been raising issues with the bank for months. Barr on Tuesday criticized SVB for going months without a chief risk officer and for how it modeled interest rate risk, but lawmakers said the response wasn't aggressive enough, with Democrat Juan Vargas saying, "it seems like they blew you guys off and you didn’t do anything."Both the Fed and FDIC are is expected to produce reports on the failure of Silicon Valley Bank by May 1.
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