But it also said the bank didn't respond quickly to concerns and recommendations it did make. Lack of adequate FDIC oversight: The report admitted to the FDIC's own shortcomings in conducting certain timely reviews of Signature Bank, blaming a staffing shortage.Tennekoon, assistant professor of economics at Indiana University, pointed out, only about 5% of its assets were in cash, compared to an industry average of 13%. Although Signature had enough reserves to comply with regulatory requirements, as Vidhura S. Liquidity risk: The FDIC said the bank's poor governance and risk management made the bank unable to manage its liquidity in a time of stress.A Congressional Research Service report on the SVB and Signature failures noted that uninsured deposits can lead to widespread bank runs-as uninsured depositors try to avoid losses by withdrawing funds before the money’s gone. An abnormally large share of uninsured deposits: Signature Bank reported $79.5 billion in estimated uninsured deposits as of December 2022-meaning about 90% of all its deposits were uninsured.Management failure to understand the risks of its concentration in the crypto sector: See the “What Did Crypto Have to Do with It?” section later in this article.The bank had 40 private client offices across metropolitan New York, Connecticut, California, Nevada, and North Carolina. Signature Bank had clients in middle-market companies but was especially known for catering to law offices, real estate buyers, and cryptocurrency companies. Signature Bank functioned as an FDIC-insured, New York state-chartered commercial bank, primarily working with privately owned businesses. Signature Bank’s failure raised many policy questions around FDIC insurance, and bank and cryptocurrency oversight.An April 2023 FDIC report blamed Signature's failure on bank mismanagement, a lack of corporate governance, and failure to listen to and respond quickly to the FDIC's recommendations.Federal regulators said Signature Bank customers would get all deposits back, even amounts over $250,000 that are uninsured by the Federal Deposit Insurance Corp.
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