Barr: Larger banks face increased scrutiny in the wake of SVB

Federal Reserve Vice Chair for Supervision Michael Barr said Friday that bank supervisors are increasing scrutiny for larger banks in the wake of Silicon Valley Bank’s failure due in part to large unrealized losses.

"The Federal Reserve has issued more supervisory findings and downgraded firms' supervisory ratings at a higher rate in the past year [and] increased our issuance of enforcement actions," he said. Barr noted that the increased scrutiny is not a policy shift but a response to the evolving economic and interest rate environment. Barr also said regulators would be closely monitoring for commercial real estate lending where risks may be heightened. He also flagged enhanced supervisory coordination for banks nearing the $100 billion-asset threshold to ensure a smoother transition to increased supervision for fast-growing banks.