Updated

A new report indicates that Federal Reserve staff should have identified vulnerabilities at Silicon Valley Bank ahead of its 2023 failure but failed to act on available warning signs. Fed Vice Chair for Supervision Michelle Bowman highlighted the findings, which add to ongoing scrutiny of the central bank's supervisory practices. A follow-up account of the report suggests regulators sat on known flaws at SVB in part because they feared being wrong about the severity of the risks, a dynamic that contributed to the delayed response before the bank's collapse. The additional detail deepens criticism of the Fed's internal culture around supervisory decision-making.