Fed's Vice Chair for Supervision Michael Barr to lead review of failed Silicon Valley Bank's regulation
Mar 14, 2023
Washington [US], March 14 : The Federal Reserve Board on Monday (local time) announced that Vice Chair for Supervision Michael S Barr is leading a review of the supervision and regulation of failed Silicon Valley Bank.
The review will be publicly released by May 1, an official statement by US Federal Reserve said.
"We need to have humility, and conduct a careful and thorough review of how we supervised and regulated this firm, and what we should learn from this experience," said Vice Chair Barr.
According to US central bank Chair Jerome Powell, the events surrounding Silicon Valley Bank failure demand a "thorough, transparent, and swift" review by the Federal Reserve.
The US-based Silicon Valley Bank collapsed on Friday. The crisis-hit Silicon Valley Bank's shares tumbled over 60 per cent, data showed.
Following the Silicon Valley Bank, New York-based Signature Bank was closed by the state regulators on Sunday (local time), becoming the second US bank to have collapsed.
Right after the two US banks collapsed, the US government and regulators on Sunday (local time) said the actions taken so far demonstrate their commitment to ensuring that depositors' savings remain safe.
In aftereffect, some other US banks too saw a sharp dip in their share prices.
US President Joe Biden on Monday (local time) said the American banking system remains safe.
"Small businesses across the country that had accounts at Silicon Valley Bank and Signature Bank can breathe easier knowing they'll be able to pay their workers. It won't cost taxpayers a dime. This is paid for with the fees that banks pay into Deposit Insurance Fund," said Biden.
As these banks collapse, the Federal Deposit Insurance Corporation (FDIC) was appointed as a receiver, which typically means it will liquidate the bank's assets to pay back its customers, including depositors, and others.
Further, the Federal Reserve Board had announced it will make available additional funding to eligible depository institutions to help assure banks have the ability to meet the needs of all their depositors.
