The Federal Reserve Bank Of San Francisco's Head of Supervision and Credit, Azher Abbasi, is set to retire on October 31. Abbasi leads bank supervision at the San Francisco Fed, which has faced criticism for its allegedly deficient oversight of Silicon Valley Bank (SVB) before its collapse. Although not explicitly named, Abbasi has come under scrutiny in post-event evaluations and from Congress members regarding SVB's failure.
Early in the aftermath of Silicon Valley Bank's failure, observers sought to analyze what could have been done differently to prevent it. "There's slowness between when things are spotted and when their enforcement actions or other things are taken and that pipeline of speed is not very speedy at any juncture," said SF Fed President Mary Daly last month, attributing SVB's failure to delayed regulatory response, indicating a broader issue across the regulatory framework. "That's not just a San Francisco thing," she added.
Michael Barr, the Federal Reserve Board's Vice Chair for Supervision, has blamed both bank management and supervisors for the collapse, citing inadequate regulatory standards and insufficient oversight in his April report on SVB's downfall. Notably, the San Francisco Fed was also responsible for overseeing Wells Fargo when it was involved in its fake accounts scandal several years ago.
In a recent op-ed in The Banker, Stephen Scott, Starling's Founder and CEO, argued that, in order to change banking for good, we must also change banking supervision for good. "The question supervisors are wrestling with today is this: before crisis reveals failure, how are firms to demonstrate effective risk governance – particularly of non-financial risks that flow from organisational culture and the conduct it promotes – and how are supervisors to test for this proactively?" Scott writes. [Read More]