The collapse of Signature Bank was due to poor management and inadequate risk management practices, according to the Federal Deposit Insurance Corporation (FDIC). In a post-mortem assessment, the FDIC stated that the bank pursued “unrestrained growth” using uninsured deposits without implementing liquidity risk management strategies. The FDIC also blamed Signature’s board of directors and management for failing to prioritize good corporate governance practices and not always responding or addressing FDIC supervisory recommendations.
The bank was unable to manage liquidity, which led to its collapse. According to the report, Signature Bank frequently refused to address the FDIC’s concerns and failed to implement the regulator’s supervisory recommendations. Additionally, there were reports that two government bodies were investigating the bank for possible money laundering prior to its collapse.
