Federal Reserve will re-examine its own oversight of Silicon Valley Bank
The US Federal Reserve (Fed) has announced it will lead a review of its own supervision of the Silicon Valley Bank (SVB). March 13th.
Fed Considers Its Own Regulation
Vice-Chair of Oversight Michael S. Barr said the SVB’s failure required “humility and … a careful and thorough review.” Barr himself will lead the review, scheduled for May 1st.
Federal Reserve Chairman Jerome H. Powell added that the collapse of the SVB requires a “thorough, transparent and expeditious investigation” by the authorities.
Elsewhere, industry watchdog Better Markets Proposed The Federal Reserve Board cannot review its own activities. Instead, the group says it should appoint an independent investigator to conduct the investigation.
The Federal Reserve does not currently have primary responsibility for addressing the SVB’s failure, so the course of action ultimately taken should not directly impact investors. Instead, that obligation falls on the Federal Deposit Insurance Corporation (FDIC). The Federal Deposit Insurance Corporation (FDIC) originally closed the bank on March 10, saying it would act as the recipient.
The FDIC states: March 13th Move all user assets to Bridge Bank so that users can access those funds. The Wall Street Journal also reported that the FDIC try a re-auction Silicon Valley Bank continues its recovery.
SVB did not primarily serve the cryptocurrency industry
Silicon Valley Bank did not primarily serve cryptocurrency companies, but at least two blockchain companies had funds in the bank. Stablecoin issuer Circle said SVB has a reserve of $3.3 billion. With the news, USD Coin (USDC) lost its peg to the dollar this weekend, but Circle has access to the funds and USDC is worth $1.00 once again.
Meanwhile, bankrupt lender BlockFi held $227 million in Silicon Valley banks, according to a statement by U.S. officials filing for bankruptcy.
The collapse of SVB was preceded by the collapse of Silivergate Bank on March 8 and the seizure of Signature Bank on March 12.
