You Don’t Want to Know How Banks Make Their Sausage
Post-mortems from the Fed and the FDIC on Silicon Valley Bank are clues to how financial institutions really operate.
What’s really going on.
Photographer: Al Drago/BloombergNormally, the words exchanged between bank and regulator don’t leave the room.
Bank examiners are bound by strict confidentiality requirements that can land them with fines or even jail time if they are breached. Nor can banks themselves reveal confidential supervisory information because even though they are party to it, the material is deemed the property of the Federal Reserve. And good luck trying to lodge a Freedom of Information request. Exemption 8 of the Freedom of Information Act explicitly exempts from public disclosure any information “contained in or related to examination, operating, or condition reports prepared by, on behalf of, or for the use of an agency responsible for the regulation or supervision of financial institutions.”