San Francisco Fed leader Daly likely not a major player in SVB saga, officials say

cnbc.com:

San Francisco Fed President Mary Daly, whose district saw the second-largest bank failure in U.S. history and who has become a target of criticism, would not have typically been a key player in Silicon Valley Bank's supervision, several former and current fed officials told CNBC.

A highly centralized design to the Fed's oversight of large banks such as SVB with assets over $100 billion put supervision under the staff and leadership of the Federal Reserve Board of Governors in Washington.

Regional Fed presidents can be more or less involved in monitoring their biggest banks, these officials said, but the key decisions about policy and enforcement would have been taken in Washington, not by Daly.

«She was not in the chain of command,» one former Fed bank president told CNBC. «Supervisory action taken by the San Francisco Fed staff would have been cleared by Washington.»

Daly and Fed board officials declined to comment for this report. The officials who spoke to CNBC requested anonymity so they could speak candidly on the issue.

Regional bank presidents and the supervisory staff directly supervise smaller community banks with assets under $100 billion.

But while the examiners for big banks work in the regional offices are hired and can be fired by the regional bank presidents, the bulk of their reporting is overseen by the board in Washington.

The failure of SVB earlier in March sent shock waves through the banking industry and ignited fears of bank runs on mid and small-sized banks.

Data show hundreds of billions of dollars have poured out of smaller banks, with some going to larger banks, and hundreds of billions of dollars more leaving the banking system and ending up in money market mutual funds.

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