San Francisco Fed President Mary Daly's district oversaw the second-largest bank failure in U.S. history.
San Francisco Fed President Mary Daly, whose district saw the second-largest bank failure in U.S. history and who has become a target of criticism, would not have typically been a key player in Silicon Valley Bank's supervision, several former and current fed officials told CNBC.
"She was not in the chain of command," one former Fed bank president told CNBC. "Supervisory action taken by the San Francisco Fed staff would have been cleared by Washington." Data show hundreds of billions of dollars have poured out of smaller banks, with some going to larger banks, and hundreds of billions of dollars more leaving the banking system and ending up in money market mutual funds.
SVB experienced massive growth in 2020 and 2021 and moved into the category of Large Bank Organizations, where the bulk of the supervision was handled by examiners in the San Francisco Fed who reported mostly to Washington. Officials said these MRA or MRIAs would have been approved by Washington. In the summer of 2022, the bank's rating was lowered to "fair" and its governance rated as "deficient."
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