Federal Reserve says its oversight of SVB was inadequate and regulatory standards were too low in a scathing review of the crisis. Read on
Before the twin failures in March, banking regulators had focused most of their supervisory firepower on the very biggest U.S. banks that were seen as critical to financial stability.
“Contagion from the failure of SVB threatened the ability of a broader range of banks to provide financial services and access to credit for individuals, families, and businesses,” Barr said. “Weaknesses in supervision and regulation must be fixed.” Barr signalled in his letter on Friday that this situation would change. “We need to develop a culture that empowers supervisors to act in the face of uncertainty,” he said.
The Fed is looking at linking executive compensation to fixing problems at banks designated as deficient on management so as to focus executives’ attention on those problems, a senior Fed official said in a briefing.Article content
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