The US Federal Reserve is considering tougher rules and oversight for midsize banks similar in size to Silicon Valley Bank (SVB), the Reuters reported. Moreover, reports have also emerged claiming US prosecutors are investigating the sudden collapse of Silicon Valley Bank as scrutiny mounts over the firm's sudden collapse.

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The review of the bank's failure being conducted by US Federal Reserve Vice Chair for Supervision Michael Barr could lead to strengthened rules on banks in the $100 billion to $250 billion range.

Wall Street Journal reported earlier that the US central bank was reconsidering regulations regarding midsize banks, which could lead to more stringent capital and liquidity requirements.

As per the report, the US Justice Department is probing the sudden demise of the bank which was shuttered last Friday. However, the inquiry is not public and is in its initial stage.

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According to the Wall Street Journal, the country's Securities and Exchange Commission has launched a parallel investigation. Officials are also examining stock sales by officers of SVB Financial Group, which owned the bank.

Silicon Valley Bank's collapse set off fears across the financial system and drove an extraordinary government effort to reassure depositors.

On March 10, the California Department of Financial Protection and Innovation (CDFPI) ordered the Silicon Valley Bank to shut shop and hand over operations to Federal Deposit Insurance Corporation (FDIC)

-With inputs from Reuters

Also Read: SVB collapse: Shareholders sue Silicon Valley Bank parent, CEO and CFO for fraud

First Published:Mar 15, 2023 7:32 AM IST