Fed Review Found Examiner Failures in Silicon Valley Bank Collapse

A new review commissioned by Fed Vice Chair Michelle Bowman reveals that examiner inaction and bank risk mismanagement led to the 2023 collapse.

Updated on Sept. 18, 2026 in Banking

Isometric editorial illustration of balanced, opaque rectilinear forms on a stone plinth, representing institutional financial oversight and systemic structure. — A new Federal Reserve review finds that examiner inaction and poor risk management significantly contributed to the 2023 collapse of Silicon Valley Bank. AI Illustration. Upload story photo >

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A review of the 2023 collapse of Silicon Valley Bank has identified a culture of risk aversion among bank examiners as a significant factor in the institution's failure. The report, presented by Federal Reserve Vice Chair for Supervision Michelle Bowman, highlights that supervisors failed to take prompt action to address the bank's unstable deposit base and large accounting losses.

Why it matters

The findings underscore the critical role that timely regulatory oversight plays in maintaining the stability of the banking system where households deposit their savings. By identifying gaps in decision-making, the report signals a potential shift toward changes in how U.S. banks are supervised and regulated.

The report reviewed bank vulnerabilities dating back to the 2018 legislation that eased certain rules for banks. It explicitly identifies large unrealized accounting losses as a primary factor in the 2023 collapse of Silicon Valley Bank.

The players

Michelle Bowman

The Federal Reserve Vice Chair for Supervision who is leading efforts to streamline U.S. bank rules.

Donald Trump

The current President of the United States who nominated Michelle Bowman to her position at the Federal Reserve.

Michael Barr

A Federal Reserve official who previously led a postmortem analysis of the Silicon Valley Bank failure.

Starling Trust Advisors

The consultancy firm that conducted the recent internal assessment of examiner behavior and bank vulnerabilities.

The details

The report from Starling Trust Advisors found that Silicon Valley Bank was ill-prepared for emergency borrowing needs, a vulnerability compounded by an unstable deposit base. Federal Reserve supervisors, meanwhile, exhibited a culture of risk aversion that prevented them from intervening before the bank's failure. This assessment suggests that a lack of clear direction and decision-making authority contributed to the oversight gaps that ultimately left the institution exposed.

2018: Congress passed a law easing rules for banks.
2023: Silicon Valley Bank collapsed.
September 18, 2026: Michelle Bowman presented the findings of the bank review.

Money Landscape

This review marks a departure from previous postmortems by focusing heavily on the internal culture of bank examiners. It places the 2023 bank failure in the context of the legislative shifts from 2018 that altered the oversight framework for mid-sized financial institutions.

While this report focuses on regulatory oversight, it serves as a reminder to ensure your own bank accounts are within FDIC insurance limits. For concerns about the stability of your specific financial institution, consider discussing your deposit strategy with a qualified financial professional.

The takeaway

The Silicon Valley Bank collapse highlights how both institutional risk management and supervisory oversight are critical to bank stability. As regulators contemplate new rules, households should continue to verify that their total deposits at any single institution do not exceed $250,000.