An external review of the Federal Reserve’s oversight of Silicon Valley Bank’s 2023 failure concluded that Fed staff “knew, or should have known,” that the bank was vulnerable before the crisis began. Fed Vice Chair for Supervision Michelle Bowman presented the findings in a speech in London on Friday.
The review was carried out by consulting firm Starling Advisory Group. Bowman said the report found that Silicon Valley Bank’s deposit base was itself a major source of risk: “94 percent” of deposits were uninsured and concentrated in venture capital-backed technology companies.
Silicon Valley Bank suffered a run in March 2023 after announcing that it had sold securities at a $1.8 billion loss and needed to raise additional capital. Its large holdings of U.S. Treasuries had fallen in value after the Fed began increasing interest rates.
After the run, the Federal Deposit Insurance Corporation and the Fed intervened, closed the bank and protected depositors. SVB’s collapse became one of the defining episodes of the 2023 banking turmoil and triggered fresh scrutiny of supervisory practices.
Michael Barr, who was then the Fed’s Vice Chair for Supervision, had already conducted a review in 2023. That assessment said Fed staff had been overly cautious in their response to the episode. The new report goes further, arguing that supervisors knew, or should have known, about the risks in advance.
Barr stepped down from the supervision role in February 2025 so President Donald Trump could choose a new top Fed regulator for oversight. Trump selected Michelle Bowman, whose nomination for the position was later confirmed by the Senate.
The release of the new review is likely to renew questions about Barr’s role in the SVB crisis, although Bowman did not mention him by name in her remarks. A Fed spokesperson did not immediately respond to a request for comment on the report.
The report was released in the same week that the Fed voted to raise interest rates for the first time since 2023. Trump has also accused the Fed’s board of being “hostile” toward him, and some analysts believe the report could intensify pressure on Michael Barr.
