Fed staff should have known Silicon Valley Bank was vulnerable, new report finds

Summary

CNBC's Matt Peterson reports on a new Fed-commissioned review of the 2023 Silicon Valley Bank collapse. The review, initiated by Fed regulatory head Michelle Bowman, concluded that Fed supervisory staff knew or should have known about SVB's vulnerabilities a year before the failure and cited a risk-averse supervisory culture. It also revises an earlier Michael Barr review by saying the 2018 law and related regulatory changes were not the cause. The discussion then turns to whether the findings make Michael Barr politically vulnerable.

• The Fed released an independent review of the 2023 Silicon Valley Bank collapse.
• The review was initiated by Michelle Bowman, who runs the Fed's regulatory arm.
• It found Fed supervisory staff knew or should have known about SVB vulnerabilities as early as a year before collapse.
• The review cites failure to prompt action on interest-rate risk and a risk-averse Fed culture.
• It revises an earlier Michael Barr review that had faulted 2018 regulatory changes.
• The report could make current Fed governor Michael Barr politically vulnerable.
• The segment discusses possible White House or Chair Warsh pressure on Fed personnel.
• No specific stocks, sectors, or tradable assets were named as investment ideas.