The SVB Report, the Banking Crisis & Other Governance Matters.

Boardroom Governance Newsletter #40 | May 3, 2023.

Art by DALL·E

“Silicon Valley Bank (SVB) failed because of a textbook case of mismanagement by the bank. Its senior leadership failed to manage basic interest rate and liquidity risk. Its board of directors failed to oversee senior leadership and hold them accountable. And Federal Reserve supervisors failed to take forceful enough action, as detailed in the report.” ~ From the Review of the Federal Reserve’s Supervision and Regulation of Silicon Valley Bank.

On April 28th, 2023, the Federal Reserve issued its Report on Silicon Valley Bank, prepared by staff from the Federal Reserve under the oversight of Michael Barr, the Vice-Chair for Supervision. The report examines the failure of SVB, its holding company Silicon Valley Bank Financial Group (SVBFG), and the oversight provided by the Federal Reserve through its supervisory and regulatory authorities.¹

The four key takeaways of the report are:

1. SVB’s board of directors and management failed to manage their risks.

2. Supervisors did not fully …