Federal Reserve Vice Chair for Supervision Michelle Bowman released an external review on Friday concluding that, prior to the bank's collapse, Fed staff "knew, or should have known," about the vulnerabilities at Silicon Valley Bank. The findings, prepared by Starling Consulting Group, were unveiled during Bowman's speech in London.

In March 2023, Silicon Valley Bank announced an $1.8 billion loss from securities sales and revealed a need to raise capital, triggering a sudden run on deposits. That announcement followed the Federal Reserve's rate-hike cycle, which had eroded the value of the bank's large holdings of U.S. Treasuries.

The review highlighted that 94% of the bank's deposits were uninsured, with account holders heavily concentrated among venture capital-backed technology firms. Bowman cited these findings in her remarks, pointing to the structural weaknesses that left the institution exposed.

In the aftermath of the run, the Federal Deposit Insurance Corporation and the Federal Reserve stepped in to take over and close the bank, while also guaranteeing depositor funds. At the time, Michael Barr, then the Fed's vice chair for supervision, led an internal investigation that concluded staff had been overly cautious in addressing the matter. The tone of this new external assessment is considerably harsher, asserting that regulators were aware or should have been aware of the risks before the crisis.

Bowman's comments come just weeks after Michael Barr stepped down from his role in February 2025, clearing the path for President Trump's nominee to take charge of Fed supervision. Bowman was subsequently nominated by Trump and confirmed by the Senate. Although Bowman did not name Barr directly during her speech, the new report is likely to intensify scrutiny over Barr's role during the crisis.

The Federal Reserve did not immediately respond to requests for comment on the report's release. Trump has previously leveled criticism at the Fed's board. Some analysts believe this report could provide fresh momentum for efforts to push Barr off the Federal Reserve's board entirely.