The Federal Deposit Insurance Corp. used its post mortem of the failure of Signature Bank to reflect on things it could have done better.
The agency said in a press release that the root cause for the New York bank’s collapse was poor management that resulted in the pursuit of rapid, unrestrained growth.
“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,” the report concluded.
While examiners issued “a number” of supervisory recommendations prior to the New York bank’s failure, the agency said they could have escalated supervisory actions sooner.
“Additionally, examination work products could have been timelier, and communication with [the bank’s] board and management could have been more effective,” the report added.
Some issues may have been tied to staffing shortages that created challenges for examiners and impeded the “timeliness and quality” of exams. The FDIC warned in a February report that more than a fifth of its staff are eligible for retirement this year.
“The bank could have been more measured in its growth, implemented appropriate risk management practices, and been more responsive to the FDIC’s supervisory concerns,” the latest report said. “The FDIC could have been more forward–looking and forceful in its supervision.”