FedFin Assessment: FDIC Blames Signature Governance, Clarifies Failure Scenario

In this report, we build on our assessment earlier today of the Fed’s SVB autopsy (see Client Report REFORM221) with an assessment of the FDIC’s self-review of Signature’s failure. As noted on Friday, the FDIC confines this report to Signature’s supervision; a separate report will address policy recommendations. Although the analysis has some findings in common with the Fed’s SVB assessment with regard to matters such as supervisors’ failure to keep up with a fast-growing bank, the FDIC principally focuses on key risk indicators at the bank rather than supervisory shortcomings. Where these are addressed, it is principally with regard to shortfalls in supervisory resources at the FDIC’s New York office along with workplace issues the FDIC was already attempting to address. As with the Fed, the FDIC gave Signature a satisfactory rating despite these weaknesses until just the day before closing the bank.