The Federal Reserve Board announced it has started a review of its monitoring of the tech startup lender days after Silicon Valley Bank crashed and shocked the financial industry.
On Monday, Vice Chair for Supervision Michael Barr was named to lead a review of the Federal Reserve’s supervision and regulation of Silicon Valley Bank, according to Federal Reserve Chair Jerome Powell.
According to Powell, the Federal Reserve must conduct a complete, open, and prompt investigation into the circumstances surrounding Silicon Valley Bank. “We need to be humble and do an in-depth analysis of how we oversaw and governed this firm, as well as what we should have learned from this experience.”
On Friday, California regulators closed Silicon Valley Bank, making it the first FDIC-insured bank to fail in more than two years. Days later, regulators closed Signature Bank, another tech-focused lender.Federal agencies have made an effort to allay concerns about the system after their closures, saying it “remains resilient and on firm foundation” because of changes put in place after the 2008 financial crisis, which saw numerous banks fail.
The public “can have trust that the banking system is safe,” according to President Joseph Biden, who stated earlier on Monday that rapid action was taken to protect depositors at the two banks.
You’ll have access to your deposits when you need them, he assured.
On May 1, the Federal Reserve Board announced that its review would be made public.
