The Colorado Springs Gazette final

Fed official tells lawmakers many to blame for Silicon Valley Bank failure

BY HANNAH LANG

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WASHINGTON • The scope of blame for Silicon Valley Bank’s failure stretches across bank executives, Federal Reserve supervisors and other regulators, the banking system’s top cop told U.S. lawmakers demanding answers for the lender’s swift collapse.

“I think that any have a bank failure time you like this, bank management clearly failed, supervisors failed and our regulatory system failed,” Michael Barr, Fed vice chair for supervision, told Congress on Wednesday. “So we’re looking at all of that.”

The failures of SVB, and days later, Signature Bank, set off a broader loss of investor confidence in the banking sector that pummeled stocks and stoked fears of a full-blown financial crisis. Depositors tried to pull more than $42 billion in a single day at SVB in early March, surprising regulators and kicking off a deposit flight across other regional banks.

“That’s just an extraordinary scale and speed of a run that I had not ever seen,” Barr said.

“I think all of us were caught incredibly off-guard by the massive bank run that occurred when it did.”

BUSINESS

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2023-03-30T07:00:00.0000000Z

2023-03-30T07:00:00.0000000Z

https://daily.gazette.com/article/281934547208891

The Gazette, Colorado Springs