US Federal Reserve Vice Chairman Michael Barr will lead the investigation. The results will be announced on May 1. Barr argues that regulators should “be humble” and “learn from the experience.”
Stricter rules
US President Joe Biden pushed for tougher rules for banks on Monday. He also scrutinized the supervisors. According to Biden it is important to ensure that problems do not repeat themselves. “We won’t stop there, we will do whatever it takes.”
SVB had borrowed when interest rates were low, but now that interest rates have risen sharply in recent months, the bank has struggled to refinance its loans. As a result, the major financier of, among others, start-ups in the technology sector ran into financial problems. SVB was shut down by California authorities on Friday after it failed to raise funds through new stock issuance.
Warranties
The American authorities have now taken over SVB and guarantee that customers will recover all their credit. They also took action at industry peer Signature Bank by shutting down the New York crypto bank. Customers of this bank, like customers of SVB, will get all their credit back.