Risk Aversion in Slow Motion: The Silicon Valley Bank Debacle A report commissioned by Michelle Bowman, vice chair of supervision at the Federal Reserve, has shed light on the catastrophic failure of Silicon Valley Bank (SVB) and the disturbing culture that allowed it to happen.
According to the Starling Advisory Group review, regulators were aware of SVB's vulnerabilities as early as March 2022 but chose inaction over taking imperfect risks.
Regulators knew or should have known about SVB's massive losses in its bond holdings, which were locked into low yielding returns due to the Fed's aggressive rate hikes.