Federal Reserve Supervisors Cited for Contributing to Silicon Valley Bank's Collapse

A post-mortem review of Silicon Valley Bank's collapse has found that a 'culture of risk aversion' among Federal Reserve supervisory staff contributed to the bank's failure. The review, which is part of an ongoing investigation into the causes of SVB's collapse, suggests that the bank's demise was not due to deregulation or social media chatter as previously thought.

According to the report, the diffusion of decision-making among Federal Reserve supervisory staff created a culture of risk aversion. This led to a lack of decisive action when it came to addressing SVB's financial issues, ultimately contributing to its collapse in 2023.