Fed faults Silicon Valley Bank execs, itself in bank failure.
WASHINGTON — Silicon Valley Bank failed due to a combination of extremely poor bank management, weakened regulations and lax government supervision, the Federal Reserve said Friday, in a highly-anticipated review of how the central bank failed to properly supervise the bank before it collapsed early last month.
“The Federal Reserve did not appreciate the seriousness of critical deficiencies in the firm’s governance, liquidity, and interest rate risk management. These judgments meant that Silicon Valley Bank remained well-rated, even as conditions deteriorated and significant risk to the firm’s safety and soundness emerged,” the report said.
The report also looks at the role social media and technology played in the bank’s last days. While the bank’s management was poor and ultimately that was the reason the bank failed, the report also notes that social media caused a bank run that happened in just hours, compared to days for earlier bank runs like those seen in 2008.
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Fed faults Silicon Valley Bank execs, itself in bank failureSilicon Valley Bank failed due to a combination of extremely poor bank management, weakened regulations and lax government supervision, the Federal Reserve says in a highly-anticipated review of how the central bank failed to properly supervise the bank before it collapsed early last month. The report issued Friday takes a critical look at what the Fed missed as Silicon Valley Bank grew quickly in size in the years leading up to its collapse. The Fed finds that while poor management ultimately doomed Silicon Valley Bank, watered down regulations and social media's ability to rapidly hasten a bank run also contributed.
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Fed faults Silicon Valley Bank execs, itself in bank failureSilicon Valley Bank failed due to a combination of extremely poor bank management, weakened regulations and lax government supervision, the Federal Reserve said Friday, in a highly-anticipated review of how the central bank failed to properly supervise the bank before it collapsed early last month.
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