An outside review of the Federal Reserve’s oversight of the failure of Silicon Valley Bank in 2023 has found the Fed’s staff “knew, or should have known,” that the bank was vulnerable prior to the crisis, Fed Vice Chair for Supervision Michelle Bowman said Friday.
Bowman announced the initial results of the review, by the consulting firm Starling Advisory Group, in a speech in London.
Silicon Valley Bank experienced a run in March 2023 after the bank announced it had sold securities at a $1.8 billion loss and needed to raise more capital. The bank’s large holdings of U.S. Treasuries had lost value after the Fed began raising interest rates.
The bank’s deposits were “94 percent uninsured and concentrated in venture capital–backed technology companies,” Bowman said the review found.
After the run, the heads of the Fed, the Federal Deposit Insurance Corporation and the Treasury Department issued a joint statement saying they would insure all deposits in the bank, even those above the FDIC’s $250,000 limit. The bank’s customers included tech startups and venture capital firms.
The Fed’s top supervisory officer at the time, then-Vice Chair for Supervision Michael Barr, conducted a review of the episode in April 2023. It found the Fed’s staff were overcautious in responding to the episode.
The new review goes farther in saying Fed supervisors knew, or should have know, about the risks in advance.
Barr stepped down from the supervisory position in February 2025 to allow President Donald Trump to select a new top regulator for the Fed. The president picked Bowman, who was confirmed by the Senate for that role.
The results of the new review are likely to prompt new questions about Barr’s role in the crisis, though Bowman’s remarks did not identify him by name.
A spokesperson for the Fed did not immediately respond to an email seeking comment on Bowman’s comments and whether the Fed might release the Starling report itself.
Trump has accused the Fed’s board of being “hostile” to him. Some analysts believe the report would prompt an attempt by Trump to remove Barr from his governorship.
The White House didn’t immediately respond to a request for comment.
Barr’s review in 2023 had found the Fed had shifted its regulatory standards following a 2018 law. That change effective reduced the Fed’s standards, Barr said, and prompted “a less assertive supervisory approach,” he said.
U.S. Federal Reserve Board Vice Chair Michelle Bowman testifies during a Senate Banking, Housing, and Urban Affairs Committee hearing on an update from the Prudential regulators, on Capitol Hill in Washington, D.C., U.S., Feb. 26, 2026.
Kylie Cooper | Reuters
The new outside review disagreed, Bowman said. “The delays in supervisory action were not caused by the regulatory tailoring mandate,” she said.
Bowman has already begun a sweeping overhaul of the Fed’s bank-oversight practices. She has said she plans to reduce the ranks of the Fed’s supervision and regulation division by about 30%. An update to the Fed’s staff page showed a dozen senior staff had left the division by early September, though some new staff had been added and others may be hired going forward.
The new review was a waste of taxpayer money, Sen. Elizabeth Warren, of Massachusetts, who is the ranking Democrat on the Senate banking committee, said in a statement following Bowman’s comments.
“It’s an embarrassing attempt to re-write history designed to pave the way for more dangerous deregulation that will lead to the next Silicon Valley Bank disaster,” Warren said.
