By Pete Schroeder

WASHINGTON (Reuters) -The U.S. Federal Reserve announced on Monday it is reviewing its oversight of Silicon Valley Bank in the wake of its abrupt failure Friday.

In a statement, Fed Chairman Jerome Powell said the bank’s failure, which set off a wave of concern over the banking system, demanded a “thorough, transparent, and swift review.” Fed Vice Chairman for Supervision Michael Barr is leading the review, and results will be publicly released by May 1.

“We need to have humility, and conduct a careful and thorough review of how we supervised and regulated this firm, and what we should learn from this experience,” Barr said in a statement.

The move from the Fed comes as policymakers grapple with how the bank, which failed within days of announcing it had to raise capital to shore up its finances, ignited fear across the banking system. Regulators were forced to announce relief measures on Sunday, reassuring customers that all the deposits from both that bank and New York-based Signature Bank, which was closed by regulators Sunday, would be covered. The Fed also announced a new facility to give banks access to emergency funds, in a bid to calm broader fears in the market.

The review suggests the Fed, which was Silicon Valley Bank’s primary regulator, could revise its policies, as policymakers across Washington grapple with what changes may need to be made to prevent future bank runs.

Under current policy, banks with over $100 billion in assets are directly supervised by the Fed, with Fed staff and governors in Washington setting the direction for oversight. The actual day-to-day monitoring is handled by supervisors from various Fed regional banks. The Federal Reserve Bank of San Francisco was responsible for Silicon Valley Bank’s supervision.

The regional bank has already come under scrutiny in the wake of the failure, with some lawmakers questioning how Silicon Valley Bank was able to rapidly grow in size and end up with over 90% uninsured deposits, which made it susceptible to a run.

“The San Francisco Fed had all the tools necessary to prevent this from happening,” Senator Bill Hagerty, a Tennessee Republican, said in an interview. “We need to understand why the San Francisco Fed wasn’t utilizing all the tools at its disposal from an oversight standpoint.”

A spokesperson for the San Francisco Fed did not immediately respond to a request for comment.

(Reporting by Pete Schroeder; additional reporting by David Morgan)