(Bloomberg) -- The Federal Reserve is launching an internal probe of its supervision of Silicon Valley Bank after its collapse sparked sharp criticism of the central bank’s oversight.

Vice Chair for Supervision Michael Barr will lead the review, due for public release by May 1, the Fed said Monday. The collapse of the lender, which was overseen by the Federal Reserve Bank of San Francisco, was the biggest bank failure in more than a decade.

“The events surrounding Silicon Valley Bank demand a thorough, transparent, and swift review by the Federal Reserve,” Fed Chair Jerome Powell said in a statement.

Questions about who was at fault in SVB’s collapse surfaced quickly after regulators were forced to take emergency action on Sunday evening to stanch instability across small lenders.

Biden administration officials are scrutinizing the quality of supervision undertaken by California state authorities and the San Francisco Fed, according to people familiar with the matter. 

Regulators in Washington are assessing whether SVB and New York’s Signature Bank, which was closed after failure on Sunday, had conducted the required planning and stress testing as the Fed raised interest rates starting last year, one of the person said, speaking on the condition of anonymity. Signature had roughly $88.6 billion in deposits as of Dec. 31.

The San Francisco Fed referred questions to the Federal Reserve in Washington, which declined to comment.

Uncovering whether regulators missed anything in the run-up to SVB’s rapid failure is a “serious question,” according to Senator Bill Hagerty, a Tennessee Republican.

“Clearly Silicon Valley Bank was mismanaged,” he said Monday on Bloomberg Radio. “I don’t think enough people have asked, ‘where was the SF Fed in terms of its regulatory oversight? Was the regulatory agency asleep at the wheel here?’” 

SVB Chief Executive Officer Greg Becker had served as a director at the San Francisco Fed until Friday, the day the bank failed and was taken over by state and federal regulators. He had served on the nine-member board since 2019.

Former Fed Governor Daniel Tarullo said that an important question was whether “the gap in supervision” was due to mistakes made by the specific supervisors responsible for SVB or whether it stemmed from guidance from the Fed in Washington about how such an oversight should be carried out.

--With assistance from Steven T. Dennis, Gregory Korte, Catarina Saraiva and Rich Miller.

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