#Fed says it must strengthen #banking rules after #SVB’s collapse
In a scathing report, the #FederalReserve on Fri outlined a series of disastrous decisions that led to the downfall of #SiliconValleyBank — including failures by the #CentralBank’s own supervisors to ward off last month’s crisis.
#Economy
https://www.washingtonpost.com/business/2023/04/28/silicon-valley-bank-collapse-investigation/
The much-anticipated 114-pg report set the stage for a new, aggressive push by #TheFed to restrengthen #BankRegulation, in an attempt to tighten up many of the rules that were eased by #Congress (after urging by the #Trump admin) in 2018 & loosened further by the Fed in 2019.…
“SVB’s failure demonstrates that there are weaknesses in #regulation & #supervision that must be addressed….
#RegulatoryStandards for #SVB were too low, the supervision of SVB did not work w/sufficient force & urgency, & contagion from the firm’s failure posed systemic consequences not contemplated by the #FederalReserve’s tailoring framework," #Fed Vice Chair for Supervision Michael Barr wrote, referring to 2018 & 2019 moves….
Barr’s investigation pointed to 4 main culprits, w/blame spanning from the bank’s reckless execs to #Congress’s push to weaken #oversight of the #banking system.
The rpt also characterized #SVB’s meltdown as a perfect storm of compounding hazards: the bank’s explosive growth, a weak supervisory culture at #TheFed, even the pandemic’s interference w/routine examinations.…
Barr, nominated by Pres Biden as the #FederalReserve’s chief #banking cop in 2022, wrote the report on SVB & will lead the push for new rules. He has long been a critic of past moves to weaken #oversight of the banking sys, which he had helped strengthen after the 2008 financial crisis.
Nonilex