The Federal Reserve has accepted some responsibility for the Silicon Valley Bank collapse and vowed to enact stricter regulation in a bombshell report released by the central bank Friday. The 114-page postmortem claims regulators were sluggish in both recognizing the problem and mounting a response, blaming a set of 2019 rule changes implemented by former head regulator Randall Quarles that significantly relaxed scrutiny on all but the biggest banks. “Following Silicon Valley Bank’s failure, we must strengthen the Federal Reserve’s supervision and regulation, based on what we have learned,” said current vice chair for regulation Michael Barr, who replaced Quarles in 2021. The report’s vociferous self-criticism, which was endorsed by Fed Chair Jerome Powell, also suggested a more agile regulatory approach in an age where online rumors like those surrounding Silicon Valley Bank can lead to bank runs in the blink of an eye.
Read it at NPR
