Federal Reserve Chair Jerome Powell didn't mince words on the collapse of Silicon Valley Bank (SVB) at a press conference announcing new interest rate hikes on Wednesday.

Powell, known for choosing his words carefully in his role as U.S. central banker, said that SVB's management "failed badly" and that its collapse isn't indicative of broader weaknesses in the banking system.

"They grew the bank very quickly; they exposed the bank to significant liquidity risk and interest rate risk; [and] they didn't hedge that risk," Powell said. "We now know that supervisors saw these risks and intervened; we know that the public saw all this."

Powell noted the concentration of SVB's customer base within a tight-knit tech community, describing it as a "very large and connected group of depositors" that initiated an unusually rapid run on the bank. SVB clients and investors withdrew about $42 billion from the bank two weeks ago, rendering it insolvent.

At the height of Covid, SVB's deposit base increased to about $190 billion in 2021 as the tech sector boomed. The bank bought up large amounts of U.S. Treasury bonds that declined in value as the Fed ratcheted up interest rates, eventually selling those holdings at a loss.

SVB's customers, many of whom were venture capitalists and startup founders, yanked billions from the bank within hours.

It was a "very fast run, faster than the historical record would suggest," Powell said.

The Fed is undergoing a review of the bank's collapse to assess what policy changes are needed to ensure "it doesn't happen again," Powell said. He declined to elaborate on what those changes might be.

SVB's collapse was the second-largest banking failure in U.S. history and triggered market turmoil and widespread fears that other banks could follow.

Federal officials took control of the failed bank on March 10 and, two days later, announced that SVB's depositors would have full access to their funds above the Federal Deposit Insurance Corporation's usual limit of $250,000. Since then, U.S. Treasury Secretary Janet Yellen has signaled that federal officials could take similar action if other banking institutions suffer deposit runs.

However, Powell described SVB's problems as unique and not a sign of widespread weaknesses across the banking sector.

"This was a bank that was an outlier both in terms of its percentage of uninsured deposits and in terms of its holdings of duration risk," Powell said.

On Wednesday, Powell announced a quarter percentage point interest rate hike as part of the central bank's ongoing effort to curb inflation.