The Fed spotted red flags at Silicon Valley Bank years before it collapsed, report says
The Federal Reserve spotted red flags at Silicon Valley Bank years before it collapsed, according to a report from theThe NYT reported that Fed officials found issues with the now-failed bank after a review in 2021. Supervisors from the San Francisco Fed gave SVB six citations that year, a source told the publication, under warnings titled"matters requiring attention" and"matters requiring immediate attention," flagging liquidity concerns at the lender.
Despite that, the issues went unaddressed at the bank, leading to a more thorough Fed review in July 2022. Officials found that SVB had inadequate oversight and control measures, and the bank was placed under restrictions that prevented it from expanding its operations, the report said. In the fall of 2022, Fed officials reportedly spoke to SVB executives, raising concerns over the bank's liquidity and how it was calculating its capital position amid rising interest rates.
According to an estimate by the FDIC, the Fed's 450 basis-points worth of interest rate increases over the last year have cost US banks
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