Federal regulators blame Silicon Valley Bank collapse on mismanagement
Second Vice Chairman of the Federal Reserve Michael Barr on Tuesday said that Silicon Valley Bank, or SVB, collapsed on March 10 due to poor risk management. Barr’s comments came as part of a Senate Banking Committee hearing on the collapse of SVB and Signature Bank. Barr also said the Federal Reserve had issued warnings to the bank since 2021, and that it would be investigating whether stronger rules are needed to prevent such failures from happening in the future.
What are other federal agencies saying? Federal Deposit Insurance Corp. Chairman Martin Gruenberg said at the hearing that the FDIC had opened an investigation into whether possible mismanagement by executives at Silicon Valley Bank and Signature Bank led to the institutions’ collapse. Both institutions became the victims of bank runs earlier this month.
Dig deeper: Read Jerry Bowyer’s column in WORLD Opinions about how bank failures often have government fingerprints all over them.
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