It failed in March but, this report shows, that regulators had already been spotting problems by then.
In fact the report says that regulators had “identified deficiencies” in the bank's management practices for years leading up to the bank's collapse. Though there had been some effort to work on these issues, the report concludes that “regulators did not take adequate measures to ensure that Silicon Valley Bank did so with enough speed.”.
They also identified a number of steps that regulators should consider taking to protect against "future economic destabilization.” These steps included:
- Creating better, faster systems
- Prioritizing regulation efforts on banks with more assets, and staffing up oversight teams if banks grow quickly and
- Telling banks to come up with a better way to handle social media, which was a key element in Silicon Valley Bank’s collapse.
State lawmakers will get a chance to ask questions about the report on Wednesday when there’s an oversight hearing scheduled. on Silicon Valley Bank's collapse where officials from the state Department of Financial Protection and Innovation are expected to give remarks and answer questions.
Legislators will consider how much responsibility state regulators bear for the bank’s ultimate demise.
This hearing comes on the heels of the collapse of First Republic, another California bank, whose collapse was accelerated by the chaos that ensued after the failure of Silicon Valley Bank.