ICBA Statement on Fed Report on Silicon Valley Bank

“ICBA appreciates Federal Reserve Vice Chair Michael Barr’s thorough and candid review of the failure of Silicon Valley Bank. However, the Federal Reserve’s admission that its supervisors failed to take forceful enough action against the 16th largest bank in the country when substantial problems were known confirms that large banks continue to enjoy preferential treatment as well as lax examination oversight and enforcement.

"As policymakers evaluate lessons learned, it is imperative that future laws and regulations address large bank risk and supervision. Community banks have served their customers for decades, withstood economic cycles, and are rigorously examined — they don’t need the kinds of government bailouts that reward mismanagement and risky behavior at larger institutions, and they don’t need additional regulation and oversight.

“Policymakers must distinguish large banks from community banks, which do not pose systemic risk nor outsized risk to the Deposit Insurance Fund. ICBA looks forward to continuing to educate the public about the strength of community banks’ relationship-based model and the reasons why policymakers should remain focused on improving large bank oversight.”