An independent review by Starling Advisory Group reveals Federal Reserve supervisors knew or should have known about severe vulnerabilities at Silicon Valley Bank (SVB) as early as March 2022, yet failed to take prompt action before its 2023 collapse triggered a banking crisis. Fed Governor Michelle Bowman summarized the findings Friday, citing a "confluence of vulnerabilities" including securities losses, a run-prone deposit base, and lack of readiness to borrow from the Fed's discount window. Bowman attributed supervisory inaction to a "long-standing culture of risk aversion" where staff avoided decisive moves unless certain they were exactly right, compounded by unclear decision-making authority.

The report dismisses theories that social media accelerated the bank run, per analysis by Charles River Associates. Failures occurred under former Vice Chair for Supervision Michael Barr, a Biden appointee who stepped down in early 2024 but remains on the Board of Governors. The review largely absolves his predecessor, Randal Quarles.

Three former Fed officials suggest Donald Trump could use the findings to push for Barr's removal, though the Federal Reserve Act permits removal only "for cause." The Fed has not released the full report.