A team of 20 bank examiners at the San Francisco Federal Reserve took over day-to-day supervision of Silicon Valley Bank in the second half of 2021, after the bank's growth pushed its assets above the $100 billion mark that triggers more intense oversight.
Soon after, supervisors began calling out problems at the bank, but only internally. None were made public until after the bank's failure on March 10, 2023, and much is still unknown.
Here's what regulators saw -- but the public did not -- in the lead-up to the collapse. The details come from testimony given by regulators to Congress this week.Examiners issue six citations -- "matters requiring attention" and "matters requiring immediate attention" -- related to the bank's liquidity stress testing, contingency funding, and liquidity risk management.
Banks of SVB's size must conduct quarterly liquidity stress tests to assess the bank's resilience to both rising and falling interest rates. A "3" rating triggers what industry experts call the "penalty box" where the bank is barred from growth by acquisition."We are looking at whether those standards were sufficiently stringent, whether the firm should have been downgraded further, and whether further supervisory steps should have been taken," Barr said.The supervisors meet with the CFO "to convey the seriousness of the findings directly," Barr said.
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