The Federal Reserve is investigating the factors that led to the failure of Silicon Valley Bank, including how it supervised and regulated the now-bankrupt financial institution..
The Federal Reserve announced on March 13 that Vice President of Supervision, Michael Barr, is “leading a review of the supervision and regulation of Silicon Valley Bank, in light of its bankruptcy.”and the report is expected to be made public on May 1.
“The developments surrounding Silicon Valley Bank call for a thorough, transparent, and expeditious review by the Federal Reserve”President Jerome Powell declared in the announcement.
@federalreserve announces that Vice Chair for Supervision Michael S. Barr is leading a review of the supervision and regulation of Silicon Valley Bank, in light of its failure. The review will be publicly released by May 1: https://t.co/wQ39KLiwHE
—Federal Reserve (@federalreserve) March 13, 2023
@federalreserve announces that Vice President of Supervision Michael S. Barr is leading a review of the supervision and regulation of Silicon Valley Bank, in light of its bankruptcy. The review will be made public by May 1: https://t.co/wQ39KLiwHE
“We need to be humble, and conduct a careful and thorough review of how we oversee and regulate this company, and what we should learn from this experience,” added Vice President Barr.
The SVB was shut down by the California Department of Financial Protection and Innovation on March 10without any specific reason being offered behind the forced closure of the bank.
However, before the shutdown, SVB was on the verge of collapse due to severe liquidity problems related to large losses on government debt investments and deposit withdrawals by frightened depositors.
It was the second major US bank to collapse in the past week, following the bankruptcy of crypto-friendly Silvergate.whose parent company, Silvergate Capital Corporation, announced a voluntary liquidation on March 8.
To increase the chaos, Another Crypto-Friendly US Bank Failed on March 12: New York Department of Financial Services Seized Control of Signature Bank.
The Federal Reserve’s latest announcement comes just one day after it launched the $25 billion Term Bank Financing Program to support banks with liquidity problems, stop new collapses and protect depositors.
THE BIG 4 US BANKS just got a $210bn Fed bailout. How? Fed’s new BTFP facility allows banks to borrow against the negative collateral value shown on the graph *AT PAR* instead of at market value(!!!). The big 4 have $210bn of these losses…#privatizedprofitssocializedlosses pic.twitter.com/9H73gLH9Uk
— Caitlin Long ⚡️ (@CaitlinLong_) March 13, 2023
THE BIG 4 US BANKS have just been bailed out by the Federal Reserve with $210 billion. As? The Fed’s new BTFP facility allows banks to borrow against the negative value of collateral shown on the chart *AT PAR* instead of at market value(!!!). The Big 4 have $210 billion of these losses…#privatizedprofitssocialized losses pic.twitter.com/9H73gLH9Uk
The Biden administration has taken swift action in that regard.; the president announced on March 13 that:
“America can trust that the banking system is secure. Your deposits will be there when you need them. […] Taxpayers will suffer no loss.”
Biden added that the heads of failing banks will be held to account for their failures, and suggested that those responsible could be prosecuted.. He also called for stricter banking supervision, stressing that thorough investigations will be carried out.
“We must get a full explanation of what happened,” he said.
1) What
— Coin Bureau (@coinbureau) March 13, 2023
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