The documents show that the Fed began to express concerns about the risk management of the Silicon Valley bank at least four years before the collapse, and issued repeated warnings.
The documents show that the Fed began expressing concerns about its risk management at least four years before the collapse of Silicon Valley Bank earlier this month.
As early as January 2019, the Fed issued a warning to SVB against its risk-management system, according to a report distributed to SVB venture capital employees last year and reviewed by The Wall Street Journal.
The Fed issued what it called a “Matter Requiring Attention” at the time, which was a lighter reminder than an enforcement action. Regulators should make sure the issue is addressed, but it’s unclear whether the Fed required SVB to that standard in 2019.
Over time, the Fed issued a number of warnings to SVB, indicating that SVB’s problems have been on the Fed’s radar. A central bank regulatory review of Silicon Valley Bank is due to be completed by May at the latest.
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The documents show that the Fed began expressing concerns about its risk management at least four years before the collapse of Silicon Valley Bank earlier this month.
As early as January 2019, the Fed issued a warning to SVB against its risk-management system, according to a report distributed to SVB venture capital employees last year and reviewed by The Wall Street Journal.
The Fed issued what it called a “Matter Requiring Attention” at the time, which was a lighter reminder than an enforcement action. Regulators should make sure the issue is addressed, but it’s unclear whether the Fed required SVB to that standard in 2019.
Over time, the Fed issued a number of warnings to SVB, indicating that SVB’s problems have been on the Fed’s radar. A central bank regulatory review of Silicon Valley Bank is due to be completed by May at the latest.
A spokesman for Silicon Valley Bank did not immediately respond to a request for comment. The San Francisco Fed also did not respond to a request for comment. The San Francisco Fed shares oversight of Silicon Valley Bank with the Washington-based Board of Governors.
The SVB collapse was the second-largest bank failure in U.S. history and the biggest test so far of a post-financial crisis regulatory framework designed to force banks to reduce risk and scrutinize banks.