Fed Report Finds Staff Should Have Identified Silicon Valley Bank Vulnerabilities

An external assessment of the Federal Reserve’s regulatory actions leading up to the 2023 failure of Silicon Valley Bank has concluded that agency staff “knew, or should have known,” about the institution’s fragility prior to the crisis. Fed Vice Chair for Supervision Michelle Bowman announced the findings during a speech in London on Friday.

The review, conducted by the consulting firm Starling Advisory Group, suggests the central bank’s oversight fell short. This conclusion goes beyond a previous internal investigation led by former Vice Chair for Supervision Michael Barr, which determined that Fed staff were overly cautious in their response to the situation.

Silicon Valley Bank suffered a depositor run in March 2023 after disclosing a $1.8 billion loss on the sale of securities and a need to raise additional capital. The bank’s significant holdings in U.S. Treasuries had declined in value as the Federal Reserve raised interest rates. Bowman noted that the review found the bank’s deposits were 94% uninsured and heavily concentrated among venture capital-backed technology firms.

The Federal Deposit Insurance Corporation and the Fed subsequently intervened to close the bank and protect depositors. Barr, who oversaw the 2023 review, departed his supervisory role in February 2025 to allow President Donald Trump to appoint a new top regulator. Bowman, selected by Trump, was confirmed by the Senate for the position.

Bowman’s remarks are expected to revive questions regarding Barr’s involvement, although she did not name him directly. A Federal Reserve spokesperson did not immediately return a request for comment on the report. Trump has previously characterized the Fed’s board as hostile toward his administration, and some analysts speculate the findings could fuel efforts to remove Barr from his governorship.