FDIC’s Valuation Process for Large Regional Bank Resolutions
November 13, 2026 / Source: OIG
The Office of Inspector General (OIG) of the Federal Deposit Insurance Corporation (FDIC) has issued its report on the evaluation of FDIC’s Valuation Process for Large Regional Bank Resolutions.
In Spring 2023, the FDIC responded to three of the largest bank failures in FDIC history with the unanticipated rapid liquidity failures of Silicon Valley Bank, Signature Bank of New York, and First Republic Bank. While responding to these failures and executing its FDI Act responsibilities under compressed timeframes, the FDIC did not consistently adhere to its established policies and procedures for the valuation function.
The objective of the evaluation was to determine the extent to which the FDIC adhered to established policies and procedures consistent with Federal Deposit Insurance (FDI) Act requirements for the valuation function in response to the failures of SVB, Signature, and First Republic.
We found that the FDIC did not (1) complete required reconciliations of bank financial data, (2) separately value a specialized asset, (3) obtain full asset valuation reviews for Signature Bank of New York and Silicon Valley Bank, or (4) conform to established resolution guidance and practices for First Republic Bank. In addition, key FDIC documentation for the Spring 2023 failures did not provide sufficient rationale and justification to support asset valuation conclusions and was not retained in accordance with FDIC requirements and best practices. We also observed that FDIC models provided incomparable or unreliable asset valuation and receivership expense information for use in large regional bank failures.
FDIC valuations based upon unreconciled financial information, alternative methods, and incomplete records can result in reduced confidence and assurance in the FDIC’s valuation processes, inaccurate estimates, and hinder least cost requirements. We made five recommendations intended to improve FDIC capabilities and practices when responding to the unique challenges that large regional bank failures present. The FDIC concurred with all five recommendations and plans to complete all corrective actions by September 30, 2027.