Silicon Valley Bank did a ‘horrible’ job, Fed says
WASHINGTON. The maximum regulator of UNITED STATESthere fedhe told a panel of Senate that he Bank of Silicon Valley (BLS) did a “horrible” job of risk management before its collapse, fending off criticism from lawmakers who blamed watchdogs for ignoring warnings.
At the first hearing of the Congress Following the collapse of two regional US lenders and the ensuing chaos in the markets, Democratic and Republican lawmakers pressed the main banking regulator, the Federal Reserve, on whether it should have been more aggressive.
“It seems regulators were aware of the issue, but no one pressed the button,” said Democratic Senator Jon Tester.
Michael Barr, the Fed’s vice chairman for oversight, criticized the SVB for months without a chief risk officer and for its handling of interest rates, which he called “absolutely unrealistic”.
The supervisors of the fed they had brought these issues to the bank’s management’s attention, but they were not resolved, he added.
“The risks were there, regulators were pointing them out and the bank was not acting,” he said.
The failure of SVB and, a few days later, Signature Bank, triggered a widespread loss of investor confidence in the banking sector that hurt stocks and stoked fears of a financial crisis.
The agreement to save the Swiss giant Swiss credit last week and the sale of SVB’s assets to First Citizens Bancshares this week helped restore some calm to markets, but investors remain cautious amid further difficulties in the financial system.
Senior officials on the Senate Banking Committee agreed with Barr that the banks had been mismanaged and that former executives should be held accountable, but they also questioned how they could sink so quickly with regulators at the top.
Barr told the Commission that he first learned of Silicon Valley Bank’s interest rate risk concerns in mid-February, but Federal Reserve supervisors raised the issues directly with the Bank. bank months earlier.
Source: El Heraldo De Mexico
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