Fed Appoints Ex-Ripple Advisor to Oversee Failed Silicon Valley Bank (SVB)

Former Ripple advisor and current Federal Reserve Oversight Vice Chairman Michael Barr has reportedly been appointed by the regulator’s board to lead oversight and regulatory review of the Silicon Valley Bank case. Barr will be tasked with conducting a thorough and comprehensive review of how failed banks are supervised and regulated, and preparing a corresponding follow-up publication by May.

Earlier, Ripple CEO Brad Garlinghouse confirmed that the cryptocurrency firm had contacts with Silicon Valley Bank, but did not clarify the amount of funds held there. However, according to Garlinghouse, there is no reason to worry and Ripple is in good financial shape.

Silicon Valley Bank collapses

Recall that Silicon Valley Bank, the 18th largest US bank by assets, declared bankruptcy late last week. It did so when it became insolvent due to a bank run, when many of SVB’s customers simultaneously wanted to withdraw their funds. However, the initial panic intensified after the balance sheet leaks of other major regional banks Silvergate and Signature Bank (SBNY) were discovered.

It is also believed that analyst Byrne Hobart’s February 23 newsletter may have been the trigger for the bank run at SVB. In it, Hobart said the bank was more than a quarter insolvent, noting the discrepancy between the market valuation of the bank’s assets and its actual leverage ratio of 185 to 1.

Related Posts