ourselves accountable and would help to eliminate the doubts that may naturally accompany any self - assessment prepared and reviewed by a single member of the board of governors. 5 this external independent report should also cover a broader time period, including the events of the weekend following the failure of svb, and a broader range of topics beyond just the regulatory and supervisory framework that applied to svb, including operational issues, if any, with discount window lending, fedwire services, and with the transfer of collateral from the federal home loan banks. second, i believe we need to do a better job identifying the most critical issues and moving quickly to remediate them. it is evident that both supervisors and bank management neglected key, long - standing risk factors that should be an area of focus in any examination. these include concentration risk, liquidity risk, and interest rate risk. we have the tools to see government accountability office, “ bank regulation : preliminary review of agency actions related to march 2023 bank failures ” gao - 23 - 106736 ( washington : government accountability office, april 2023 ), https : / / www. gao. gov / assets / gao - 23 - 106736. pdf ; federal deposit insurance corporation, “ fdic ’ s supervision of signature bank ” ( washington : federal deposit insurance corporation, april 28, 2023 ), https : / / www. fdic. gov / news / press - releases / 2023 / pr23033a. pdf ; michael barr, vice chair for supervision of the board of governors of the federal reserve system, “ review of the federal reserve ’ s supervision and regulation of silicon valley bank ” ( april 28, 2023 ), https : / / www. federalreserve. gov / publications / files / svb - review20230428. pdf. as noted in vice chair for supervision michael barr ’ s review of the supervision and regulation of silicon valley bank, “ [ the ] report was written with the benefit of hindsight on the particular facts and circumstances that proved most relevant for svb and svbfg. the report was prepared in a compressed time frame from march 13, 2023, through april 28, 2023, and further work over a longer period could draw additional or different conclusions. ” barr, review of the federal reserve ’ s supervision and regulation of silicon valley bank. - 10 address these issues, but we need to ensure that examiners focus on these core risks and are not distracted by

, in my mind, not the right approach. in a time of potential stress, we need to be forward focused on bank preparedness so that banks are positioned to address issues of concern. these include being prepared to address contingency funding needs, with a plan in place that has - 8been tested and is ready to be executed. regulators need to be supportive of this kind of planning. one of the preliminary lessons learned from the recent bank failures is that bank management, and their boards of directors, should be prepared to test the banks ’ ability to manage liquidity needs during times of stress. this is one area where i think bankers can make an important, immediate contribution. i strongly encourage bankers to consider creating a plan to handle liquidity needs during times of unexpected stress — and then test the ability to execute the plans. adverse conditions can escalate quickly, and influences beyond a bank management ’ s control, including irrational actors, can impact your business in very short order. for example, we know that a number of banks have not registered for or accessed the federal reserve ’ s discount window. but if the bank plans include accessing discount window lending — even if the likelihood of that stress is extremely remote — it is critical to understand in advance the steps needed to be taken during the emergency. this could include testing the capacity to pledge collateral or even just contacting your local reserve bank to learn about or complete the necessary onboarding procedures. the path forward my views on the path forward are informed by serving as the bank commissioner for the state of kansas as its lead regulator and supervisor, my experience as a banker, and especially by my service on the board of governors since 2018, during a time when the banking system has experienced many unique stresses including those associated with the covid pandemic. there have already been some preliminary and expedited internal reports published on the failures of svb and signature bank, and i fully expect to see additional reports and analysis of these - 9failures, and the failure of first republic, in the coming months. 4 these preliminary reviews are an important first step for the u. s. bank regulators working to identify root causes of these bank failures and holding themselves accountable for supervisory mistakes. there are additional steps that we can take. first, i believe that the federal reserve should engage an independent third party to prepare a report to supplement the limited internal review to fully understand the failure of svb. this would be a logical next step in holding