Larry explains that the problem was supervisory, not regulatory:
SVB and the other banks are supervised by the San Francisco Fed, which is run by Mary Daly. It was completely asleep at the switch. First Republic bank also comes under Ms. Daly’s purview.
What were they doing while these banks were taking cheap money deposits and investing in long-term duration government and mortgage bonds? The management of risk by these banks was a catastrophe, and it had been going on for well over a year. So where was Ms. Daly and her team of bank examiners?
Then you read about a $5 billion one-chunk investment in some kind of climate fund that was completely untested and who knows what other left-wing romping was going on in these woke banks. By the way, Ms. Daly is considered to be quite a wokester herself.
House Financial Services Committee chairman, Patrick McHenry, should haul Ms. Daly and other regional Fed bank heads in front of his committee and find out what the heck they were doing while these banks were going crazy.
