The document pointed out that since 2019, the US Federal Reserve (Fed) has issued multiple warnings on Silicon Valley Bank's risk management and control issues.


[Financial Channel/Comprehensive Report] The recent collapse of Silicon Valley Bank (SVB) triggered a global banking tsunami. However, whether the collapse of Silicon Valley Bank (SVB) was caused by the Federal Reserve (Fed)’s aggressive interest rate hikes in the past year, or the bank’s own risk management problems ?

Documents have found that, in fact, since 2019, the Fed has repeatedly issued warnings about Silicon Silver’s risk management capabilities.

The document shows that the asset size of Silicon Silver was only US$70 billion (NT$2.1 trillion) in 2019. At that time, the Fed issued a risk management system notice to Silicon Silver. One year later, the asset size of Silicon Silver grew to 114 billion. U.S. dollars (NT$3.4 trillion), the Fed once again issued a warning, requiring corrections and enforcement by regulatory agencies.

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However, these warnings did not prevent Silicon Bank from expanding rapidly. The bank's assets will reach US$209 billion (NT$6.3 trillion) in 2021. This time, Fed officials noticed that things are a bit big, and the bank's cash liquidity is worrying. Therefore, Silicon Bank There are 6 warnings, which are divided into "Need Attention" and "Need Immediate Attention".

After that, silicon silver has not yet repaired the defects. The Fed will conduct a comprehensive review in July 2022. Officials found that silicon silver has governance and risk control problems. The bank is subject to various restrictions and cannot further expand its business.

In September of the same year, the market value of its maturing bonds was already lower than the US$15.9 billion (NT$482 billion) on its balance sheet.

Until the beginning of this year, Fed officials reassessed Silicon Bank to measure its risk management strength. After inspection, they found defects again. Then Silicon Bank closed down in just a few days, triggering a series of explosions in the banking industry.

However, some people have questioned the Fed’s regulatory capabilities. Keith Noreika, who served as the auditor general of the U.S. Office of the Comptroller of the Currency (OCC) in 2017, said why the Fed allowed Silicon Silver to continue to expand after discovering the problem.

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