Federal Reserve supervisors knew about Silicon Valley Bank’s major vulnerabilities at least nine months before its 2023 failure but failed to act appropriately, Governor Michelle Bowman said in an Oct. 15 speech.
The Federal Reserve Board published “Bowman, Supervisory Modernization After Silicon Valley Bank” on Oct. 15. Bowman said a newly released independent assessment shifted responsibility from social media and regulatory changes toward failures in supervisory accountability and decision-making.
The assessment examined the bank’s failure and the Federal Reserve’s supervision before the Federal Deposit Insurance Corporation placed SVB into receivership in 2023. Its preliminary findings drew on information available to frontline examiners, risk and surveillance specialists, Reserve Bank officials and Board staff, Bowman said.
Those officials knew about SVB’s exposure to interest-rate and liquidity risks at least nine full months before receivership, the assessment found. Long-standing uncertainty over decision-making authority and unclear accountability impeded timely decisions, Bowman said.
The assessment rejected earlier characterizations that social media caused the bank run or that statutory tailoring and regulatory changes prevented the Fed from acting, Bowman said. It instead identified persistent accountability and decision-making problems as the main contributors to delays in critical enforcement actions.
SVB received 54 matters requiring attention or immediate attention between 2019 and its failure, Bowman said. None required the bank to address its core financial risks, as supervisory attention often focused on processes, governance and controls rather than interest-rate and liquidity exposures.
Bowman said earlier reports were prepared quickly, had limited scope and did not comprehensively address data related to the failure. The independent assessment remained preliminary, and she said it was intended to close gaps and correct conclusions she described as unreliable.
The findings showed supervisors needed clear authority, defined responsibility and accountability for resolving disagreements, Bowman said. Surveillance, specialist teams and data analysis could identify risks, but those capabilities required a clear route from information to judgment and action.
The Federal Reserve was considering changes to its supervisory decision-making framework, Bowman said. The Board also refined supervisory operating principles first published in the fall of 2025 to incorporate lessons from its review of the 2023 banking stress.
Bowman said the principles directed supervisors toward early identification of material risks and timely, proportionate action. Proportionality meant matching oversight to an institution’s size, complexity, activities, business model, interconnectedness and potential effect on financial stability, rather than weakening supervision.
The assessment also found the Basel Committee on Banking Supervision and the Financial Stability Board relied on incomplete U.S. reports issued soon after SVB’s failure, Bowman said. Both bodies used language taken nearly verbatim from other reports without independently verifying it or broadening the supporting evidence, the assessment found.
Bowman said international standard-setting bodies should concentrate on safety, soundness and financial stability while remaining driven by evidence and data. Their work should distinguish threats to an institution from less consequential matters so supervisors can act before risks become unmanageable, she said.
