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Fed's review into #SVB's failure is out. Key takeaways (thread):
1. SVB's board of directors and management failed to manage their risks;
2. Federal Reserve Supervisors did not fully appreciate the extent of the vulnerabilities as SVIB grew in size and complexity;
(continued)
1. SVB's board of directors and management failed to manage their risks;
2. Federal Reserve Supervisors did not fully appreciate the extent of the vulnerabilities as SVIB grew in size and complexity;
(continued)
3. When supervisors did identify vulnerabilities, they didn't take sufficient steps to ensure that #SVB fixed those problems quickly enough;
(continued)
(continued)
4. Fed's tailoring approach in response to the Economic Growth, Regulatory Relief & Consumer Protection Act and shift in stance of supervisory policy impeded effective supervision by reducing standards, increasing complexity, and promoting a less assertive supervisory approach.
The press release notes that at the time of its failure, #SVB had 31 unaddressed safe and soundness supervisory warnings - triple the average number for peer banks.
Press release is here federalreserve.gov/newsevents/pre…
and report can be downloaded here federalreserve.gov/publications/r…
and report can be downloaded here federalreserve.gov/publications/r…
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