US Federal Reserve Chairman Jerome Powell.

Photo: Getty Images/RT

The president of the Federal Reserve of the United States, Jerome Powell, harshly criticized the management of Silicon Valley Bank (SVB) and blamed it for lack of judgment for bankrupting one of the largest banks in the country.

“At a basic level,

the management of Silicon Valley Bank failed badly


They made the bank grow very quickly, they exposed it to significant liquidity and interest rate risk, but they did not cover those risks," he said at a press conference on Wednesday.

In his opinion, those risks were visible and understandable to everyone.

“SVB experienced an unprecedented large-scale and rapid withdrawal of funds from its accounts by a concentrated group of related depositors.

Faster than what could be expected based on historical data," stressed the head of the US central bank.

Powell refrained from elaborating on his perception of the causes of the entity's collapse.


he assured that his greatest interest is to identify "what went wrong" and "how it happened"


"We will find (the answers) and then we will make an evaluation of what are the correct policies to implement so that (something similar) does not happen again," he added, quoted by RT.

Finally, the Federal Reserve Chairman emphasized that the problems that SVB was unable to remedy were unusual and did not reflect the systemic situation of national banks.

These are not weaknesses at all of the entire banking system.

This was an outlier bank in terms of its percentage of uninsured deposits and in terms of its duration risk holdings,” Powell explained.

On March 10, Silicon Valley Bank carried out the largest bank failure in the US since the global financial crisis of 2008.

The country's 16th largest bank collapsed after depositors withdrew their money, as concerns spread over the bank's crisis.

Faced with this situation, banking regulators took possession of the bank and appointed the Federal Deposit Insurance Corporation (FDIC) as receiver, which in turn hastened to close the bank.

Interest rate hike in the US "could not be worse", according to Elon Musk

Elon Musk.

Photo: Getty Images

Meanwhile, the American businessman Elon Musk criticized this Wednesday the decision of the Federal Reserve to raise the reference interest rate of federal funds by 25 basic points (0.25%), up to a target range of 4.75% - 5 %, which represents

the highest level since the end of 2007


Musk commented on a Twitter post stating that Federal Reserve Chairman Jerome Powell stated that "the banking system is safe."

The billionaire explained why high interest rates have a negative effect on the banking system.

“One of the main drivers of depositor flight is the transfer of money from low interest savings accounts to high interest money market accounts (Treasury Bills).

This silly rate hike will exacerbate depositor flight,” he wrote.

Later, Musk added that the situation

"couldn't be worse."

His comments came after the Federal Reserve

raised interest rates for the ninth time


Previously, the tightening of monetary policy was explained by the need to combat high inflation, but now its effects have been aimed at

dealing with the banking crisis


Biden's approval rating falls

Joe Biden.

Photo: Europa Press

US President Joe Biden's acceptance rate has fallen to near its lowest point in a month,

amid bank failures and inflation that remains high

, says a poll by AP and

NORC Center for Public Research at the University of Chicago


According to the results of the poll, which shows that there have been modest fluctuations in support for Biden in recent months,

only 38% of those surveyed are satisfied with the performance of the president

, seven points less than in February and only two points more than its lowest rate, reached last July, when the full weight of the increase in gasoline, food and other costs began to affect American households.

(With information from RT in Spanish and AP)

see also

About fifty US banks could fail