Fed scrutiny after SVB — credit tightens

A Federal Reserve internal review dated April 28, 2023 concluded supervisors failed to escalate concerns at Silicon Valley Bank and recommended strengthening oversight, triggering a Fed-led reassessment of supervisory practices. (federalreserve.gov) Fed Vice Chair for Supervision Michael Barr and Fed official Michelle Bowman have since pushed a broad overhaul of bank supervision, and Bowman announced a new external review and staffing changes — including plans to cut roughly 30% of Washington staff — on March 20, 2026. (money.usnews.com) The Federal Reserve’s Senior Loan Officer Opinion Survey (July 2025) reported that, on balance, banks tightened lending standards and saw weaker demand for commercial-and-industrial (C&I) loans across firms of all sizes in Q2 2025. (federalreserve.gov) Trade groups and industry lenders report manufacturers are facing longer bank underwriting cycles, tighter covenants and a shift toward asset‑based revolvers as banks avoid bespoke financing, leaving a growing role for private credit to fill working‑capital needs. (aem.org) SVB’s March 10, 2023 failure removed a major provider of venture and deposits for tech firms, shrinking traditional venture‑debt capacity and pushing startups toward private funds and nonbank lenders that are pricing and structuring deals more conservatively. (capitaladvisors.com) Manufacturers facing longer vendor lead times are increasingly using trade‑credit insurance and larger prepayment or inventory financing facilities to secure big component orders, while banks’ bespoke commercial underwriting can now take weeks to months to complete. (marshmma.com) (finhelp.io) (marshmma.com) A November 2024 GAO review (GAO‑25‑106771) and subsequent oversight recommendations highlighted delays in escalating supervisory concerns before SVB’s collapse, and regulators say they are implementing those GAO recommendations as part of the current supervisory revamp. (files.gao.gov)