SVB statement from Fed Vice Chairman Barr

Michael Barr, Vice President of Financial Institutions of the US Federal Reserve (Fed), noted that the bankruptcy of the Bank of Silicon Valley (SVB) was a “bad management case” and that the bank management could not effectively manage the interest rate and liquidity risk.

Fed, Barr USA He shared the text of the speech that the Senate Banking, Housing and Urban Affairs Committee will hold tomorrow on the latest bank failures and federal regulator intervention.

Emphasizing that the banking system of the USA is solid and resilient with its strong capital and liquidity, Barr stated that they will continue to closely monitor the conditions in the banking system, and that they are ready to use all tools for institutions of all sizes when necessary to keep the system safe and sound.

“HE HAS THE PAIN OF ESCAPE”

“SVB went bankrupt due to bank management’s failure to effectively manage interest rate and liquidity risk, and the bank then suffered the devastating and unexpected flight of uninsured depositors in less than 24 hours,” Barr said. made its assessment.

“THE BANK WAIT TOO LONG TO SOLVE ITS PROBLEMS”

Noting that the bankruptcy of the SVB requires a comprehensive review, including the Fed’s control over the bank, Barr said, “The bankruptcy of the SVB is a case of mismanagement in the textbook.” used the phrase.

“The bank has waited too long to fix its problems, and ironically the belated actions it took to strengthen its balance sheet sparked the flight of uninsured depositors that led to the bank’s bankruptcy,” said Michael Barr. made his comment.

Pointing out that the bankruptcy of the SVB threatened the entire banking system, Barr said that they are working on improving the stress test and amending the liquidity rules, as well as long-term debt requirements for large regional banks.

A trustee was appointed to SVB, the 16th largest bank in the USA, on March 10, and the bankruptcy of the bank was one of the biggest bankruptcies since the 2008 global financial crisis. (AA)

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