Our Take
An outside review staffed by figures with Fed connections and commissioned by a board member who has already telegraphed her conclusions is unlikely to produce the accountability the public record still lacks.
Why it matters
SVB's 2023 failure cost depositors billions and exposed major gaps in Fed supervision. Congress and regulators still don't agree on who was responsible, and a compromised investigation could bury that question for good.
Do this week
Compliance teams: audit your institution's conflict-of-interest policies around board memberships and supervisory roles before the next oversight cycle, since SVB's CEO sat on the San Francisco Fed's board.
The Fed Commissioned an Independent Review It May Have Compromised
Three years after Silicon Valley Bank failed in March 2023, the Federal Reserve has hired Starling Trust Sciences, a risk management firm founded by investigator Stephen J. Scott, to conduct an external review of the Fed's supervision of SVB. Fed Vice Chair for Supervision Michelle Bowman championed the probe after publicly criticizing the Fed's internal 114-page report compiled under her predecessor Michael Barr, calling it insufficient and pledging an independent review during her confirmation hearing.
Scott says his focus is on "facts, not politics, and on problems, not people." The review aims to understand how governance structures, management decisions, supervisory practices, and market conditions combined to produce the failure. Starling's board of advisors includes former National Economic Council director Gary Cohn, former New York Fed President Bill Dudley, and former ECB Supervisory Board member Elizabeth McCaul. Former Fed Vice Chair Randal Quarles has also done work for the firm.
Several of SVB's independent board members have agreed to participate. However, multiple former Fed employees have declined to be interviewed for the review (more than one, fewer than ten, per Scott). The facts of SVB's collapse remain undisputed: rapid pandemic-era deposit growth from venture-backed customers, heavy investment in long-dated Treasuries, interest rate exposure, and supervisory failures to catch these vulnerabilities as the bank faced deposit runs.
Bowman's Previous Statements Have Already Written the Conclusion
Bowman has repeatedly stated that the Fed took its "eye off the ball" and was "distracted" by matters unrelated to material financial risks at SVB. This framing, delivered in congressional testimony and various public remarks, already signals what the Starling review will conclude. Dennis Kelleher, head of regulatory reform group Better Markets, argues the probe is "not a real investigation" and will become "a political club" Bowman will use to advance a supervisory agenda favoring financial risks over processes and documentation.
Graham Steele, staff director of the Corporations and Society Initiative at Stanford Graduate School of Business and former Treasury official, is more direct: "It's difficult to see why the Fed would spend its resources reopening this episode unless they have a desire to rewrite history in some way." He calls the most charitable interpretation "whitewashing" and warns the report could become "a pretext for policy or personnel actions."
Aaron Klein of Brookings notes that the Fed's initial report omitted a material fact: SVB's CEO Greg Becker was a Class A director of the San Francisco Fed, the very regional bank that supervised his institution. Three prior government reports and two congressional hearings have already identified the causes (interest rate risk, rapid growth, sector concentration, and regulatory lag), yet the question of individual and institutional accountability remains unanswered.
The Probe Illustrates Why Outside Reviews Require Structural Independence
When a regulator commissions an external review from consultants whose advisors include current and former officials from that same regulator, and whose conclusions are pre-announced by the commissioning authority, the exercise ceases to be investigative. It becomes defensive.
For regulated institutions, the lesson is clear: demand that any external review of your organization's conduct include truly independent parties with no prior relationships to internal leadership, no shared professional networks, and explicit authority to publish findings without approval gates. When SVB's independent board members participate in Starling's review but former Fed employees refuse, that asymmetry itself signals the probe's credibility problem.
Congress has signaled it wants answers. Rep. Andy Barr told Bowman the committee "deserves answers, objective answers." Starling's review may document what went wrong operationally. It is unlikely to establish who bears responsibility, and that omission is already baked in.