The Federal Reserve’s banking watchdog said on Tuesday that it first became aware of the rate of interest risk issues at Silicon Valley Bank in mid-February, just weeks before its collapse.
Fed Vice Chairman for Oversight, Michael Barr, told the Senate Banking Committee that Fed staff gave a presentation to the central bank board in mid-February saying they were talking to the SVB about the risks related to rising rates of interest.
“Staff highlighted the rate of interest risk that was present at Silicon Valley Bank and indicated they were within the means of further review,” Barr said.
“I feel I used to be first told about the rate of interest risk at Silicon Valley Bank.”
Fed supervisors had previously raised serious concerns about SVB’s rate of interest risk and liquidity management and requested the bank to make adjustments in November 2021, Barr said.
In mid-2022, Fed staff deemed the bank’s governance to be flawed and prohibited the bank from expanding through mergers or acquisitions, Barr said.
![Michael Barr testified on Tuesday.](https://nypost.com/wp-content/uploads/sites/2/2023/03/NYPICHPDPICT000008897752.jpg?w=1024)
![Silicon Valley Bank](https://nypost.com/wp-content/uploads/sites/2/2023/03/NYPICHPDPICT000008478535.jpg?w=1024)
He said Fed supervisors brought these issues to SVB’s CFO in October 2022, and raised additional concerns with SVB management in November.
But Barr said the problems weren’t brought back to him until last month’s staff presentation.
“To the perfect of my knowledge, I first became aware of the problems at Silicon Valley Bank with respect to rate of interest risk in mid-February 2023,” said Barr.