Fed Review Cites Risk-Averse Culture in SVB Supervisory Failures

An independent review commissioned by Federal Reserve Vice Chair for Supervision Michelle Bowman has concluded that Fed supervisors knew or should have known about critical vulnerabilities at Silicon Valley Bank as early as March 2022 but failed to act due to a culture of risk aversion and unclear decision-making. The preliminary findings, released on September 18, 2026, attribute the supervisory delays to internal cultural issues rather than external factors like the 2018 regulatory tailoring law or social media. The review, conducted by Starling Advisory Group, found that SVB's failure in March 2023 resulted from a confluence of vulnerabilities: large unrealized losses on its securities portfolio that exceeded its capital, a run-prone deposit base that was 94 percent uninsured and concentrated among venture capital-backed technology companies, and a lack of operational readiness to borrow from the Fed's discount window. Supervisors identified these risks but did not take prompt and decisive action to address them. Fed Vice Chair Bowman stated that a significant factor behind the inaction was a longstanding culture of risk aversion among examiners.