US Fed -Silicon Valley Bank Failed to Clear US Fed Emerging Review System.
The Silicon Valley Bank customers had withdrawn more than $10 billion within a few hours, after which the Federal Reserve closed it on March 10. Two days later, Signature Bank of New York was also ordered to be locked by the Federal Reserve.
Federal Reserve Blamed poor bank management-
The US central bank, the Federal Reserve, on Friday blamed a combination of poor bank management, weak regulation and lax government oversight for the collapse of Silicon Valley Bank (SVB) last month. This review report has been prepared by the Federal Reserve to find out the reason behind the sinking of SVB. According to this, the lapses related to regulation and monitoring of this bank, which grew rapidly in the last few years, spelled its downfall.
Silicon Valley Bank Management did not take strict action-
The report, led by Federal Reserve Deputy Chief Michael Burr, says the central bank’s work culture has also played a role in this, with supervisors not able to take a tough stand on bank management even when they see the problem growing. The Silicon Valley bank, for many years a favorite of venture capital firms and technology startups, suddenly plunged in early March. Because of this, a kind of distrust of the entire American banking system was created.
Silicon Valley Bank was closed on 10 March-
The bank’s customers had withdrawn more than $10 billion within a few hours, after which the Federal Reserve closed it on March 10. Two days later, Signature Bank of New York was also ordered to be locked by the Federal Reserve. The report also highlights the role of social media and technology in the downfall of SVB. The report says that it was because of social media that people were inspired to withdraw huge amounts from the bank within a few hours.
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