for release on delivery 9 : 10 a. m. est february 16, 2024 supervision with speed, force, and agility remarks by michael s. barr vice chair for supervision board of governors of the federal reserve system at the annual columbia law school banking conference new york, new york february 16, 2024 thank you to columbia university and the organizers for the opportunity to speak today. 1 it has been nearly a year since the sudden failure of silicon valley bank ( svb ) and ensuing turmoil in the banking system, events which prompted important questions about how banks manage risks and how we at the federal reserve supervise that risktaking. it is a fitting time to share some reflections on the importance of the day - to - day work of bank supervision and the steps we are taking to improve the speed, force, and agility of supervision. review of silicon valley bank let me begin by summarizing my review of the failure of silicon valley bank. this was the first major bank failure since the global financial crisis, and it necessitated a deep, unflinching review of what went wrong. so, following the failure, chair powell and i determined that it would be appropriate for me to lead a review on the conditions that led to svb ’ s failure. experienced and well - respected staff from around the federal reserve system who were not involved in svb ’ s supervision conducted the review. the review found that, first and foremost, the bank ’ s management failed to manage the bank ’ s risks, and its board failed to oversee management. 2 but the review also found that federal reserve supervisors did not identify issues quickly enough, and when we did identify risks, we were too slow to act with sufficient force to change management behavior. the views expressed here are my own and are not necessarily those of my colleagues on the federal reserve board. board of governors of the federal reserve system, review of the federal reserve ’ s supervision and regulation of silicon valley bank ( washington : board of governors, april 2023 ), https : / / www. federalreserve. gov / publications / files / svb - review - 20230428. pdf. - 2the svb report identified the need to improve the speed, force, and agility of supervision to align with the risks, size, and complexity of supervised banks. to do this, the report identified several areas of focus, including intensifying supervision at the right pace, encouraging timely supervisory action and escalation, and

make our foreign exchange obligations more expensive but, this will be countered by a smaller oil ( import ) bill from lower oil prices. the drop in oil prices will also ease inflation and benefit consumers. nevertheless, we need to be mindful of the risk of a sudden reversal in the trend. if low oil prices persist, the economies of oil - producing countries may eventually weaken and adversely affect the global economy. for certain, there will be pluses and minuses. we could see sporadic market volatility in the interim. nevertheless, from our experience and track record, it can be said that we are equipped to deal and handle these issues. let us also remember that we start 2015 with a credit rating that is two notches into investment grade territory. higher state spending on infrastructure and the implementation of projects under the public - private partnership program should also provide stimulus for growth moving forward. i believe, therefore, that even as episodes of stormy weather develop, the philippine banking community can face 2015 with confidence given its strong balance sheet, solid capital base that exceeds global standards, product innovations, and adherence to international standards for governance and risk management. of course, we still need to continue working together on our reform agenda to achieve a more inclusive financial system that promotes inclusive growth, strengthen consumer protection, forestall emerging risks, and ensure financial stability at all times. this is the philosophy that underpins our reform program. together, let us craft the way forward to an even better, stronger and more inclusive banking system. only by doing so can we preserve the gains we have achieved so far. and we do have a long way to go, given that 25 % of filipinos still live in poverty. of course, there is so much more that our banks have empowered and continue to support – from the cities to the countryside. ladies and gentlemen. i have learned in my almost 10 years as governor of the bangko sentral that each year is different. while our mandate remains the same, our operating environment is constantly shifting and changing. sometimes, it turns on its head. so, how do we navigate in uncharted waters? well, with extreme care : we have to make sure that we are in shipshape condition, that we are properly equipped for the journey ahead, and that we remain watchful of possible risks. ladies and gentlemen, i believe we are ready to take on the challenges and opportunities that lie ahead. let us now offer a toast : may i request the members of