Federal Reserve Vice Chair for Supervision Michael S. Barr told senators that regulators warned Silicon Valley Bank of interest rate and liquidity risks, as Republicans and at least one Democrat seek to blame regulators for the bank’s failure.
Barr, in testimony before the Senate Banking Committee on Tuesday, detailed warning signs and deficiencies that regulators found in the Santa Clara, Calif., bank in the year and a half leading up to its collapse in early March. The warnings are normally kept confidential between regulators and banks.
“This is a textbook case of bank mismanagement. The risks that they faced, interest rate risks and liquidity risks, those are bread-and-butter banking issues,” Barr said. “The firm was quite aware of those issues. It had been told by regulators. Investors were talking about problems with interest rate risks publicly. It didn’t take the actions necessary.”
