Answer:
Supervisors at the Federal Reserve Bank of San Francisco, which oversaw Silicon Valley Bank, issued six citations. Those warnings, known as “matters requiring attention” and “matters requiring immediate attention,” flagged that the firm was doing a bad job of ensuring that it would have enough easy-to-tap cash on hand in the event of trouble.
Step-by-step explanation:
Pressure has mounted on the Federal Reserve since Silicon Valley Bank collapsed last week.
This has been the function of a few things: advocates who want to see more scrutiny applied to the central bank, suggestions that the agency failed in its supervisory role at SVB and other lenders, and an ongoing debate over whether decisions the Fed made in 2019 to deregulate midsized banks contributed to the collapse.
Part of the questions around supervision come down to the ways in which the Fed did or did not make use of the tools that it has available to scrutinize banks from within before they collapse. But a report on Friday from Bloomberg suggests that supervisors were aware of mounting problems at the bank before it collapsed.
Per Bloomberg, SVB received several notices from supervisors at the Fed warning it of a key problem on its balance sheet — unhedged interest rate risk.
It’s that risk which, analysts say, contributed to the blowup last week, and which created a vulnerability that helped spark a run on the bank that saw a whopping $42 billion in deposits leave in the course of a day.