Fed chairman Powell explained the collapse of the SVB bank as the company’s management failed to manage the risks.
WASHINGTON, March 22 – RIA Novosti. Federal Reserve Chairman Jerome Powell said the collapse of US bank Silicon Valley Bank (SVB) was not due to weaknesses in the US banking system, but to the company’s failure to manage risks.
“The Silicon Valley Bank leadership … failed to deal with risk management. These are not weaknesses in the banking system,” he told reporters.
Powell added that the bankruptcy of the SVB showed the need for greater control and oversight of the US banking sector.
On March 10, regulators in the state of California closed Silicon Valley Bank, one of the twenty largest commercial banks in the United States. This was the largest bank failure in the United States since the 2008 financial crisis. All insured deposits were transferred from the SVB to a separate entity – the National Bank of Santa Clara Deposit Insurance. In addition, authorities have closed the major New York Signature Bank due to systemic risks, and it was announced that the crypto-focused bank Silvergate will also be closed.
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