A new independent Fed review confirms that supervisory staff failed to act on known vulnerabilities at Silicon Valley Bank for over a year, citing a culture of inaction and bureaucratic ambiguity.
The Fed's independent review confirmed SVB supervisors knew of interest-rate and concentration risks before the 2023 failure, reinforcing the bank's governance failures.
An independent review by the Starling Advisory Group reveals that Federal Reserve supervisors identified Silicon Valley Bank's interest-rate and concentration risks as early as March 2022. The report concludes that a culture of risk aversion and unclear decision-making protocols prevented regulators from taking necessary corrective actions before the bank's failure in March 2023.
The review identified a culture of risk aversion among staff, who preferred inaction over the risk of acting incorrectly, compounded by unclear decision-making authority.