In this and subsequent reports, we build on our initial reactions to SVB/SBNY reports from the Fed, FDIC, and GAO, focusing in more depth on the agencies’ plans for near-term action with strategic consequence and key points in the GAO’s report that will strongly influence Hill reactions on both sides of the aisle.  Informed by today’s rescue of First Republic – on which more is to come from us shortly – FedFin starts here with the Fed, not going into detail on the results of its extensive fact-finding unless new facts are likely to influence near-term policy and political response.  As previously noted, the Fed’s report acknowledges serious supervisory shortcomings, with the detailed analysis concluding that the “root cause” of this is “difficult to ascertain, especially given the impact of the pandemic on remote supervision in 2020 and 2021.”

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