Signature Bank (SBNY) fell apart due to mismanagement by its officers and “contagion effects” after the collapse of Silicon Valley Bank (SVB) and wind-down of Silvergate Bank, a federal bank regulator said Friday.

The Federal Deposit Insurance Corporation (FDIC) published a 63-page report outlining issues Signature faced, attributing its failure to “poor management,” saying the bank heavily relied on uninsured deposits, did not have strong liquidity risk management practices and maintained poor risk management in general. These factors were exacerbated by a bank run spurred by the collapse of the other banks, the report said. The bank servicing the crypto industry was also cited as a major risk factor.

“Additionally, SBNY failed to understand the risk of its association with and reliance on crypto industry deposits or its vulnerability to contagion from crypto industry turmoil that occurred in late 2022 and into 2023,” the report said.

(by Sandali Handagama)