Michael Barr will lead supervision of collapsed Silicon Valley Bank (SVB) on Fed’s side
Ripple’s former advisor and current Vice Chairman for Supervision at the Federal Reserve Michael Barr has reportedly been appointed by the regulator’s board as head of supervisory and regulatory review in the Silicon Valley Bank case. Barr will be responsible for a thorough and comprehensive review of how the failed bank was supervised and regulated, and preparing a corresponding follow-up publication by May.
Earlier, Ripple’s CEO, Brad Garlinghouse, confirmed that the crypto company had exposure to Silicon Valley Bank, but the amount of funds held there was not clarified. However, according to Garlinghouse, there is no cause for concern, and Ripple is in a strong financial position.
Collapse of Silicon Valley Bank
Recall that Silicon Valley Bank, the 18th largest U.S. bank by assets, declared bankruptcy late last week. It did so as a result of insolvency uncovered by a bank run, when numerous customers of SVB simultaneously wished to withdraw their funds. The initial panic, however, rose after holes on balance sheets were uncovered at other major regional banks, Silvergate and Signature Bank (SBNY).
It is also believed that analyst Byrne Hobart’s newsletter of Feb. 23 may have been the trigger for the bank run on SVB. In it, Hobart stated that the bank had been insolvent for more than one quarter and pointed to a discrepancy between the market valuation of the bank’s assets and its actual leverage of 185 to 1.