The U.S. Federal Reserve had been worried about Silicon Valley Bank’s risky practices for more than a year before its collapse this month, according to a New York Times report, and had repeatedly warned the bank.
The U.S. Federal Reserve had been worried about Silicon Valley Bank’s risky practices for more than a year before its collapse this month, according to new reports, and had repeatedly warned the bank.
Citing sources familiar with the matter, the New York Times reported Sunday that serious weaknesses were found in a 2021 Fed review concerning how the bank handled its risks, issuing six citations. Despite those urgent calls to address problems, Silicon Valley Bank did not address the vulnerabilities, the Times reported.
Separately Sunday, the Wall Street Journal reported the Fed’s worries about SVB’s risk management dated back to 2019. The Journal also reported that in 2020, the Fed warned SVB that its risk controls did not meet expectations for large financial institutions. At the time, the bank was undergoing rapid growth during the early stages of the pandemic.
By early this year, the Times reported, SVB was under a “horizontal review” by the Fed, to test the strength of its risk management — and additional deficiencies were reported. Soon after, there was a run on the bank’s funds and it collapsed.Separately Sunday, Reuters reported the Federal Deposit Insurance Corp. is planning to relaunch a sale of Silicon Valley Bank, after no buyers emerged in previous sale attempts over the past week, under a plan that would also break up the bank.
Purchase bids for SVB’s private bank, which caters to high-net-worth individuals, would be due by Wednesday, according to Reuters and Bloomberg, while bids for the “bridge bank” set up by the FDIC are due Friday, Bloomberg reported.
Canada Latest News, Canada Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Fed had expressed its concerns over Silicon Valley Bank for a year: reportSerious weaknesses first found in 2021, New York Times reports; FDIC reportedly to relaunch SVB sale this week in two parts
Read more »
Bank fail: How rising interest rates paved the way for Silicon Valley Bank's collapseSilicon Valley Bank invested billions of dollars in super safe U.S. government bonds. But that choice exposed to the bank to a whole other set of risks.
Read more »
Bank fail: How rising interest rates paved the way for Silicon Valley Bank's collapseSilicon Valley Bank invested billions of dollars in super safe U.S. government bonds. But that choice exposed to the bank to a whole other set of risks.
Read more »
Feds Warned Silicon Valley Bank of Major Issues Years Before CrashThe Federal Reserve had been monitoring Silicon Valley Bank’s shaky ground for more than a year, repeatedly warning the bank of its problems, a source has told the New York Times.
Read more »