Federal Reserve announces initial findings on Silicon Valley Bank's failure

Federal Reserve: The Federal Reserve is the central banking system of the United States tasked with monetary policy and oversight of depository institutions. It conducted internal reviews after Silicon Valley Bank's failure but supplemented them with this external assessment of supervisory shortcomings. The organization is now implementing updated operating principles and cultural changes in response to the report. Michelle W. Bowman: Michelle W. Bowman is the Vice Chair for Supervision at the Federal Reserve Board of Governors. In this role she oversees supervision and regulation of financial firms and has announced initial findings from an independent review of Silicon Valley Bank's failure. She brings prior experience as a state bank commissioner and in various federal policy positions. Silicon Valley Bank: Silicon Valley Bank was a depository institution focused on serving technology and venture capital clients. Its failure in March 2023 triggered broader banking sector stress and prompted calls for independent scrutiny of supervisory processes. The current speech announces initial findings from that external review of the bank's collapse and related oversight lapses. Starling Advisory Group: Starling Advisory Group is the independent firm commissioned to examine the facts surrounding Silicon Valley Bank's failure and the Federal Reserve's supervisory actions. Its report delivers the first set of findings on whether vulnerabilities were identified in advance and why decisive action was not taken. The review operates separately from Federal Reserve staff to ensure integrity. Review Purpose: The independent review examines whether Federal Reserve supervisory staff identified Silicon Valley Bank's vulnerabilities in advance and why prompt action was not taken. Supervision Reforms: The Federal Reserve has issued a Statement of Supervisory Operating Principles that prioritizes early identification of threats to safety and soundness while expanding supervisory options beyond formal actions. Culture and Accountability: New monthly reporting requirements for examination teams to senior leadership are intended to reduce risk aversion and clarify decision rights in the supervisory process.