Banks that help fuel the tech economy must take a hard look at their practices to prevent future collapses.
May 3, 2023 at 5:30 a.m.That’s the hard lesson from the collapse of two of the Bay Area’s premier regional banking institutions: San Francisco’s First Republic Bank and Santa Clara’s Silicon Valley Bank.
It’s clear that both managers were overly optimistic that interest rates would remain low, protecting their long-range investments. First Republic, the second-largest U.S. bank by assets to collapse, was seized by regulators Monday and sold to JPMorgan Chase. Silicon Valley Bank failed March 23 after a bank run and was acquired by First Citizens Bank. At the time, it marked the third-largest bank failure.released Friday, the Federal Reserve took full responsibility for its lapses in oversight of SVB.
• Congress’ decision in 2018 to relax regulatory standards for banks impeded effective supervision of SVB and promoted a “less assertive supervisory approach.”
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