On April 28, 2023, the FDIC released an internal review evaluating the agency’s supervision of Signature Bank, New York, New York, from 2017 until its failure in March 2023. The FDIC’s Supervision of Signature Bank identifies the causes of Signature Bank’s failure and assesses the FDIC’s supervision of the bank.
Based on the report, poor management is the root cause of Signature Bank’s failure. The report also pointed out the former bank’s board of directors and management pursued rapid, unrestrained growth without developing and maintaining adequate risk management practices and controls appropriate for the size, complexity and risk profile of the institution. In addition, the bank’s management did not prioritize good corporate governance practices, did not always heed FDIC examiner concerns, and was not always responsive or timely in addressing FDIC supervisory recommendations (SRs). According to the FDIC, the Signature Bank’s rapid growth was funded through an overreliance on uninsured deposits without implementing fundamental liquidity risk management practices and controls.
In a separate article, we wrote about the Federal Reserve Board’s announcement of the result of the Silicon Valley Bank supervision review.
Read the FDIC’s full press release here.
The FDIC’s Supervision of Signature Bank can be found here.