Fed Staff Knew SVB Was Vulnerable, Outside Review Finds — SkimNews
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- Starling Advisory Group's outside review found Fed staff 'knew, or should have known' that Silicon Valley Bank was vulnerable prior to the 2023 crisis, Vice Chair for Supervision Michelle Bowman announced Friday.
- Silicon Valley Bank's deposits were '94 percent uninsured and concentrated in venture capital–backed technology companies,' the review found.
- SVB experienced a run in March 2023 after announcing it sold securities at a $1.8 billion loss; its large U.S. Treasury holdings had lost value as the Fed raised interest rates.
- After the run, the FDIC and Fed stepped in to close the bank and insure depositors.
- Then-Vice Chair for Supervision Michael Barr's own 2023 review found Fed staff were 'overcautious' — the new Starling review goes further, saying supervisors should have known about the risks in advance.
- Barr stepped down from the supervisory post in February 2025 to let President Donald Trump pick a new top regulator; Trump chose Bowman, who was confirmed by the Senate for the role.
- Trump has accused the Fed board of being 'hostile' to him, and some analysts believe the report could prompt an attempt to remove Barr from his governorship.
Why it matters: Bowman — Trump's pick to replace Barr as the Fed's top supervisor — is now the one releasing a report that could be used to push Barr off the Fed board entirely, despite Barr's own 2023 review first flagging supervisory concerns. With Trump having already labeled the board 'hostile,' Barr's governorship becomes the next pressure point in an escalating fight over Fed independence.
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