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Depositors had pulled $100 billion from accounts at the bank in the panic triggered by the SVB and Signature failures, imperiling its survival. Both SVB and Signature failed last month. Both SVB and Signature grew quickly in recent years, outpacing the ability of regulators to keep up, especially with shrinking resources. Regulators closed Signature two days after SVB was shuttered. Signature lost 20% of its total deposits in a matter of hours on the day that SVB failed, FDIC Chair Martin Gruenberg has said.

Both SVB and Signature failed last month. Regulators shut SVB on March 10, a day after customers withdrew $42 billion and queued requests for another $100 billion the following morning. Both SVB and Signature grew quickly in recent years, outpacing the ability of regulators to keep up, especially with shrinking resources. Regulators closed Signature two days after SVB was shuttered. Signature lost 20% of its total deposits in a matter of hours on the day that SVB failed, FDIC Chair Martin Gruenberg has said.

In what Fed Vice Chair for Supervision Michael Barr called an "unflinching" review of the U.S. central bank's supervision of SVB, the Fed said its oversight of the Santa Clara, California-based bank proved inadequate and that regulatory standards were too low. At the time of its failure, SVB had 31 unaddressed citations on its safety and soundness, triple what its peers in the banking sector had, the report said. Barr said as a consequence of the failure, the central bank will reexamine how it supervises and regulates liquidity risk, beginning with the risks of uninsured deposits. "Contagion from the failure of SVB threatened the ability of a broader range of banks to provide financial services and access to credit for individuals, families, and businesses," Barr said. The Fed is looking at linking executive compensation to fixing problems at banks designated as deficient on management so as to focus executives' attention on those problems, a senior Fed official said in a briefing.

[1/4] A view of the Park Avenue location of the First Republic Bank, in New York City, U.S., March 10, 2023. FDIC regulators had raised the specter of systemic risk from the failure of large regional banks months before the SVB and Signature Bank collapses, records reviewed by Reuters show. SECRETS REVEALEDThe Fed will release its report on SVB at 11 a.m. EDT (1500 GMT) on Friday. FDIC Chair Martin Gruenberg has not provided much detail about the supervision of Signature, which like SVB had grown rapidly in recent years. The Fed's inspector general will have a report on each bank in the third quarter.

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