Fed official tells Congress many to blame for Silicon Valley Bank failure

WASHINGTON, March 30 — The scope of blame for Silicon Valley Bank’s failure stretches across bank executives, Federal Reserve supervisors and other regulators, the banking system’s top cop on Wednesday told US lawmakers demanding answers for the lender’s swift collapse.

Depositors tried to pull more than US$42 billion in a single day at SVB in early March, surprising regulators and kicking off deposit flight across other regional banks.“I think all of us were caught incredibly off-guard by the massive bank run that occurred when it did.” Barr on Tuesday criticised SVB for going months without a chief risk officer and for how it modelled interest rate risk, but lawmakers said the response wasn’t aggressive enough, with Democrat Juan Vargas saying, “it seems like they blew you guys off and you didn’t do anything.”Both the Fed and FDIC are is expected to produce reports on the failure of Silicon Valley Bank by May 1.

SVB and Signature became the second- and third-largest bank failures in US history. Investors fled to safe havens like bonds while depositors moved funds to bigger institutions and money market funds.

Source: Financial Digest (financialdigest.net)

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