Supervision Board Says Fed Dropped the Ball on SVB Oversight

At the time of its collapse, Silicon Valley Bank had 31 open supervisory findings, about 3 times as many as its peers


Lotus_studio/Shutterstock modified by Blockworks


The Federal Reserve had insufficient regulatory standards for recently closed Silicon Valley Bank, a new report finds. 

Fed Vice Chair for Supervision Michael Barr led the investigation into how Silicon Valley failed and the role the central bank played. 

“The supervision of SVB did not work with sufficient force and urgency, and contagion from the firm’s failure posed systemic consequences not contemplated by the Federal Reserve’s tailoring framework,” Barr wrote in the report, published Friday. 

At the time of its collapse, SVB had 31 open supervisory findings, which the Fed files when a bank has concerns requiring federal government attention. Other banks under the Fed’s purview had around 10 supervisory findings, the report added. 

The Fed noted risks in SVB’s liquidity, capital, management and asset quality, among other things, every year between 2020 and 2022 but did not file additional supervisory findings until November 2022. In this finding, the central bank announced plans to downgrade SVB’s rating related to interest rate risk, but Silicon Valley failed before the downgrade was made. 

Supervisory findings on the whole have been declining since 2014, the Fed notes in a separate report

The report criticizes former Fed Supervision head Randal Quarles, appointed under President Trump, for a “cultural shift” that led to more relaxed oversight over SVB and other institutions. 

Going forward, Barr says central bankers will work toward a “stronger regulatory framework.” 

“With respect to capital, we are going to evaluate how to improve our capital requirements in light of lessons learned from SVB,” Barr wrote in the report. “We are also going to evaluate how we supervise and regulate liquidity risk, starting with the risks of uninsured deposits.”

Get the day’s top crypto news and insights delivered to your email every evening. Subscribe to Blockworks’ free newsletter now.

Want alpha sent directly to your inbox? Get degen trade ideas, governance updates, token performance, can’t-miss tweets and more from Blockworks Research’s Daily Debrief.

Can’t wait? Get our news the fastest way possible. Join us on Telegram and follow us on Google News.


upcoming event

MON - WED, MARCH 18 - 20, 2024

Digital Asset Summit (DAS) is returning March 2024. This year’s event will be held in our nation’s capital, where industry leaders, policymakers, and institutional experts will come together to discuss the latest developments and challenges in the ever-evolving world of cryptocurrency. […]

upcoming event

MON - WED, SEPT. 11 - 13, 2023

2022 was a meme.Skeptics danced, believers believed.Eventually, newcomers turned away, drained of liquidity and hope.Now, the tide is shifting and it’s time to rebuild. Permissionless II is the brainchild of Blockworks and Bankless. It’s not just a conference, but a call […]

recent research

The State of LSTFi


There are five broad use cases for LSTs that are gaining traction alongside growth in demand: leverage farming, liquidity providing, LST baskets, stablecoin collateral, and interest rate derivatives.



Alexander Vinnik’s lawyers aim to swap his freedom for detained WSJ reporter Evan Gershkovich


This latest update will introduce immutability to token metadata but ensure that its key characteristics are preserved, and it will also introduce network fees


In a blog post, partly directed at the forthcoming Eigenlayer protocol, the Ethereum co-founder cautions against overloading consensus


Hunting for victims in Ethereum’s public mempool, automated searchers prey on transactions as they are discovered in a practice called MEV


The crypto exchange that filed for bankruptcy last November would endure a long road to raise funds, clear debts and gain trust, law pros say


The broadcasters were discussing Hong Kong’s new regulations for virtual asset trading platforms set to go into effect June 1