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The Fed acknowledges errors contributing to the fall of Silicon Valley

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“After the collapse of Silicon Valley, we need to strengthen the Fed’s oversight and regulation functions based on what we’ve learned,” said US Federal Reserve Vice Chairman for Supervision Michael Barr.

Barr’s comments came in a statement accompanying a report released by the Federal Reserve today, Friday, in which he called for increased banking supervision and acknowledged his setbacks to the collapse of the Silicon Valley “SVB” bank last month.

Michael Barr said SVB management failed to adequately manage risk ahead of the bank’s rapid collapse, while Federal Reserve supervisors failed to take decisive action after identifying problems at the bank, which specializes in financing technology companies.

It is noteworthy that the collapse of the bank on March 10, taking on a lot of interest rate risks, caused a rebound in the entire banking sector, which led to the collapse of another US regional bank and the acquisition of the Swiss bank “UBS”. its competitor Credit Suisse.

In turn, a senior Fed official told reporters ahead of the release of the report that the review would be far-reaching and would take a broader look at liquidity and reserve capital rules.

For his part, Federal Reserve Chairman Jerome Powell said in a statement that he welcomed Barr’s report and his “self-criticism” over the collapse of the SVB.

Source: AFP.

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