Federal Reserve's Oversight Failures in SVB Collapse Revealed in Report

The Federal Reserve's internal watchdog released a report stating that the central bank failed to adequately supervise Silicon Valley Bank (SVB), resulting in SVB's collapse in March, according to BankingDive. The report identifies numerous instances where timely action should have been taken to address SVB's weaknesses.

SVB experienced a significant bank run after revealing a $1.8 billion loss, leading to its third-largest bank failure since 2008. The report points out that Federal Reserve supervisors didn't assess the impact of rising interest rates on SVB's investment portfolio properly and allocated insufficient resources for examination.

The report also highlights poor communication from SVB management and potential conflicts of interest, particularly the CEO's role on the San Francisco Fed Board. Lawmakers criticized this arrangement. In response, the report calls for considering standards for the service and removal of class A directors employed by supervised institutions.