5 Months After SVB's Collapse, SF Fed's Bank Supervisor 'Retires'

Five months since the epic failure of Silicon Valley Bank - due to "a significant supervisory failure,” according to Dan Tarullo, a former Fed governor who oversaw financial regulation and supervision at the board - the man responsible for that 'oversight' at the San Francisco Fed is 'retiring'.

Azher Abbasi will retire from his role as the head of supervision and credit at the Federal Reserve Bank of San Francisco effective Oct. 31, according to an email from the bank’s spokesperson.

Abbasi, along with San Francisco Fed President Mary Daly, came under scrutiny in March following the sudden collapse of SVB and other lenders.

Those episodes revealed management shortcomings at the regional Fed outpost, which is responsible for the on-the-ground supervision of small and medium-sized banks.

But we all know what really took SVB down - ZeroHedge and Putin!!!

The San Francisco Fed’s supervision unit had undergone multiple personnel changes, according to people familiar with the matter.

In 2021, the branch’s head of supervision, Tracy Basinger, retired after four years in the top job and decades climbing the ranks of that function.

By contrast, her replacement, Azher Abbasi, was formerly head of audit.

It’s not entirely uncommon for supervisory heads at the regional branches to have backgrounds in other areas, and experience is required for some roles.

Abbasi’s appointment was made in consultation with the central bank’s vice chair for supervision at the time, Randy Quarles.

“The real question here is: How come the supervisors didn’t pick up on the fact that SVB had gamed the rules to take on a lot of interest-rate risk without holding an adequate amount of capital against it?” Lev Menand, an associate professor of law at Columbia University who researches money and banking, said on Bloomberg’s Odd Lots podcast.

“It’s a pretty obvious maneuver and not a novel one — you would think any seasoned supervisor looking at the balance sheet could pick up on this quickly.”

Bloomberg reports that Niel Willardson will join the SF Fed as interim EVP, Supervision and Credit, beginning October 1, the email says.