[tomder55]

This banking crisis has and will bring a clarion call for more regulations of the banking industry. We've already had Clueless Joe pathetically blame Trump for a slight deregulation that had no impact .

The Federal Reserve system failed in more ways than can be written in a short post. So I focus on one .

What Clueless did not mention in his blame shifting is that the regulators knew in the summer what was going to happen to SVB . If you listen to the Slimes ;the Feds knew since 2021 that the bank was in danger .

Before Collapse of Silicon Valley Bank, the Fed Spotted Big Problems - The New York Times (nytimes.com)


Supervisors from the San Fran Fed gave SVB six citation under warnings titled "matters requiring attention" and "matters requiring immediate attention," flagging liquidity concerns. the issues went unaddressed at the bank.

They did a more thorough review in the summer of 2022. They found that SVB had inadequate oversight and control measures. In other words NONE .But instead of demanding they fix the problems ,they placed the bank under restrictions about expansion.

They met again with SVB in the fall to examine the bank's liquidity again.
Everyone on the planet who has basic economics understanding knew that raising interest rates would impact the bond market ....everyone except maybe SVB execs . Or maybe they just assumed that with inflation rates hovering near 10% that the Fed would leave rates near zero. SVB thought that higher rates would be to their benefit. Their bond holdings cost them $620 billion in unrealized losses.

The regulators again conducted a review of SVB early this year. The bank still had inadequacies . SVB's top execs started the process of personally bailing out of the sinking ship . But did nothing to fix the problems the regulators were warning them about for over a year.

Yeah the execs were irresponsible . But what did the regulators actually do to prevent what happened ? Not only did they not insist that the bank make corrections . They covered it up !!

Fed Blocked Mention of Regulatory Flaws in Silicon Valley Bank Rescue - The New York Times (nytimes.com)

Government officials had intended to include a statement on the flaws in banking regulation that led to the implosion of SVB .But they were excluded it from a joint statement by the Fed,Treasury ,and FDIC

Federal Reserve Board - Joint Statement by Treasury, Federal Reserve, and FDIC

Instead they had the cajónes to praise the regulations !!!

The U.S. banking system remains resilient and on a solid foundation, in large part due to reforms that were made after the financial crisis that ensured better safeguards for the banking industry..

If it wasn't so pathetically sad it would be comical. , There were plenty of regulations and processes in place to prevent the catastrophe that occurred at SVB. But what good were they when the San Fran Fed (where SVB CEO Greg Becker was on the overseer board) sat by and did nothing ?