Less than two years later, Fed Chair Jerome Powell cited systemic risk as justification to protect Silicon Valley Bank’s depositors.
By David Sirota & Julia Rock, The Lever
Less than two years before Federal Reserve Chairman Jerome Powell cited systemic risk as a justification to rescue Silicon Valley Bank’s depositors, Powell approved the same bank’s merger application, insisting that the new, larger institution would present no significant danger to the wider financial system, according to documents reviewed by The Lever.

“SVB Group’s management has the experience and resources to ensure that the combined organization would operate in a safe and sound manner,” wrote Federal Reserve officials in June 2021, as they approved the company’s $900 million acquisition of Boston Private Bank and Trust. “The organization would not be a critical services provider or so interconnected with other firms or markets that it would pose significant risk to the financial system in the event of financial distress.”
All six members of the Federal Reserve board voted to approve the merger.
Yet when financial distress hit 20 months later, the Federal Reserve board unanimously voted, alongside the Federal Deposit Insurance Corporation, to invoke the rare systemic risk exemption, giving the government the authority to guarantee Silicon Valley Bank’s uninsured deposits. The FDIC only insures up to $250,000 in each customer’s deposits, and more than 90 percent of SVB’s deposits were reportedly uninsured at the end of 2022.
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