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The collapse of Silicon Valley Bank was a “missed opportunity” for regulators and those in the financial sector who failed to heed the warning signs and head off the crisis in advance, according to a former senior deputy governor of the Bank of Canada.

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Carolyn Wilkins, who now serves as a senior research scholar at Princeton University, in addition to other roles, made comments during a university panel discussion about the crisis on April 11.

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“I think the warning signs were there ahead of time and people were talking about them,” Wilkins said, noting that the rising interest rates that contributed to the crisis were no secret. “The Fed couldn’t have been any clearer that it was raising interest rates.”

Wilkins added that at the same time, banks should have enough insight into their own interest rate sensitivities, the strength of their deposits and the risk that customers might pull their money out.

She called it a “missed opportunity” to make the right adjustments ahead of time.

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SVB’s collapse had a knock-on effect on other US regional banks, bringing down New York-based Signature Bank and pushing Swiss-based Credit Suisse AG to the brink of failure before its forced acquisition by rival UBS Group AG.

“The most spectacular event was the failure of a global, systemically important financial institution,” Wilkins said, adding that the damage could have been much worse.

“You just can’t really overstate the importance of that going well for the rest of the financial system … because of the purchase from UBS.”

Atif Mian, professor of economics, public policy and finance at Princeton, was also on the panel and flagged some of the risks of raising interest rates as quickly as the central banks had in the past year. He said the current environment presented a challenge for central banks.

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“The main reason is that the economy as it stands today is incredibly sensitive to interest rates rising in a way that has never been before,” Mian said.

Mian added that the SVB episode is making it harder for central banks to raise interest rates, potentially tying their hands in the face of persistent inflation.

The Bank of Canada signaled it is keeping a close eye on the SVB collapse and other potential shocks to the financial system shocks that the rising-rate environment may trigger.

Deputy governor Toni Gravelle said the central bank stood ready to act against any such shocks and that the US banking crisis would play a role in its next monetary policy report on April 12.

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