Sloppy management and a questionable “business model” led to the collapse, the country’s top financial regulator claims.
was mostly down to failures on the part of the bank’s management, according to the country’s top financial regulator. Michael Barr, the Fed’s Vice Chair for Supervision, called the bank’s downfall a “textbook case of mismanagement” in written testimony that will be given at a hearing of the Senate Banking Committee on Tuesday.
Barr will also blames “concentrated business model” for the calamity, in which the bank largely catered to venture capital and tech customers in Silicon Valley. He also claims the failure was caused by the bank’s incompetent management of the risk in its bond portfolio which fell in value as interest rates increased. SVB became the second-largest bank to fail in U.S. history when it collapsed earlier this month.
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