© Reuters. FILE PHOTO: Customers line up outside of the Silicon Valley Bank headquarters in Santa Clara, California, U.S. March 13, 2023. REUTERS/Brittany Hosea-Small//File Photo
By Hannah Lang and Ann Saphir
(Reuters) -The Federal Reserve will publish its internal review of its supervision of Silicon Valley Bank on Friday, April 28 at 11 a.m. ET (1500 GMT), the central bank said Tuesday.
The review, which is being led by Fed Vice Chairman for Supervision Michael Barr, follows the regional bank’s abrupt failure last month. It will include policy recommendations and confidential supervisory information that the Fed typically does not disclose to the public, Barr has said.
Depositors tried to pull more than $42 billion in a single day at SVB in early March, surprising regulators and kicking off deposit flight across other regional banks. The failures of SVB, and days later, Signature Bank (OTC:), set off a broader loss of investor confidence in the banking sector that pummeled stocks and stoked fears of a full-blown financial crisis.
Barr has criticized SVB for going months without a chief risk officer and for how it modeled interest rate risk, but some lawmakers have questioned whether the Fed was aggressive enough in its supervision of the bank.
The Federal Deposit Insurance Corp is also slated to publish a report detailing its supervision of Signature Bank as well as an overview of the deposit insurance system by May 1.
The Federal Reserve System today announced its plan to publish an assessment of its oversight of Silicon Valley Bank on April 28. The review comes as part of the Federal Reserve’s ongoing effort to ensure safety and soundness throughout the nation’s banking sector.
The review will focus on a wide range of topics, including the bank’s compliance with laws and regulations, the adequacy of its internal controls and risk management, and its financial condition. In addition to its review, the Federal Reserve may also take corrective action if it finds issues that need to be addressed.
Federal Reserve Board Governor Jerome Powell said in a statement, “The Federal Reserve is committed to ensuring that all banking institutions, including Silicon Valley Bank, comply with the laws and regulations governing their operations. We look forward to the results of our review and any necessary corrective action in the near future.”
The review is part of the Federal Reserve’s broader effort to monitor and regulate the banking sector. Other recent reviews conducted by the Fed include those of Goldman Sachs and Bank of America. The Fed also carries out regular on-site examinations of banks, which are designed to identify risks, increase safety, and strengthen protections for consumers and investors.
With the publication of its review of Silicon Valley Bank, the Federal Reserve is continuing its effort to ensure the safety and soundness of the U.S. banking system. The results of the review are expected to be published on April 28.