Silicon Valley Bank executives, supervisors at the Federal Reserve and the regulatory system all failed when considering the collapsed U.S. lender, the Fed's top bank oversight official told a Congressional hearing on Wednesday.
"I think that any time you have a bank failure like this, bank management clearly failed, supervisors failed and our regulatory system failed," Fed Vice Chair for Supervision Michael Barr told Congress in the second day of hearings on SVB's failure. "So we're looking at all of that."
Barr told the House Financial Services Committee that he first became aware of stress at Silicon Valley Bank on the afternoon of March 9, but that the bank reported to supervisors that morning that deposits were stable. Martin Gruenberg, head of the Federal Deposit Insurance Corp., told lawmakers he also became aware of SVB's stress that Thursday evening.
A deal to rescue Swiss giant Credit Suisse last week and a sale of SVB's assets to First Citizens Bancshares Barr told the Senate Banking Committee he first became aware of the interest rate risk issues at SVB in mid-February, while Fed supervisors had been raising issues with the bank directly in the months prior to that.
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