WASHINGTON (AP) — The nation’s top financial regulator is asserting that Silicon Valley Bank’s own management was largely to blame for the bank’s failure earlier this month, and says the Federal Reserve will review whether a 2018 law that weakened stricter bank rules also contributed to its collapse.

“SVB’s failure is a textbook case of mismanagement,” Michael Barr, the Fed’s vice chair for supervision, said in written testimony that will be delivered Tuesday at a hearing of the Senate Banking Committee.

Barr pointed to the bank’s “concentrated business model” in which its customers were overwhelmingly venture capital and high-tech firms in Silicon Valley. He also contends that the bank failed to manage the risk of its bond holdings, which lost value as the Fed raised interest rates.

Silicon Valley Bank, based in Santa Clara, California, was seized by the Federal Deposit Insurance Corp on March 10 in the second-largest bank failure in US history. Late Sunday, the FDIC said that First Citizens Bank, based in Raleigh, North Carolina, had agreed to buy about one third of Silicon Valley’s assets — about US$72 billion — at a discount of about US$16.5 billion. The FDIC said its deposit insurance fund wou

https://www.jamaicaobserver.com/business/fed-official-svb-itself-was-main-cause-of-banks-failure/