The Federal Reserve released an independent review regarding the collapse of Silicon Valley Bank. Led by Vice Chair for Supervision Michael S. Barr, the report concludes that regulators identified vulnerabilities but failed to act with sufficient speed to address them.
At the time of its failure on March 10, 2023, SVB had 31 open supervisory findings, which is three times the average for comparable banks. Between 2019 and 2021, the bank's assets grew from $71 billion to over $211 billion.
Supervisors noted interest rate risk issues in 2020, 2021, and 2022, but formal action was not taken until November 2022. On March 9, 2023, depositors withdrew over $40 billion in one day following a failed capital raise.
The FDIC took receivership of the bank, with costs to the Deposit Insurance Fund estimated at $16.1 billion. The review points to a 2018 regulatory framework that raised the threshold for enhanced standards from $50 billion to $250 billion in assets.
