For Immediate Release:
May 16, 2023
WASHINGTON, D.C. – U.S. Senator Cynthia Lummis (R-WY) took Signature Bank’s former Chairman & co-founder Scott Shay and former President Eric Howell to task during a Senate Committee on Banking, Housing and Urban Affairs hearing over their handling of the bank’s collapse. Lummis questioned the former bank executives on why they tried to scapegoat digital assets for Signature Bank’s collapse despite the fact that all evidence points to their own failure to adequately manage liquidity risks within the bank.
“I am a proponent of state-chartered banks. I am a proponent of the digital asset industry and it looks like there has been a lot of deflection of blame on to those particular depositors,” said Senator Lummis. “Bank executives have not accepted any blame, and I find that disconcerting and disappointing.”
Watch Senator Lummis’ questioning here.
Background:
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- Signature Bank’s collapse on March 12, 2023 was the fourth largest banking collapse in U.S. history.
- The New York State Department of Financial Services (NYDFS) concluded there were zero dollars of digital assets on Signature Banks books at the time of the collapse, only cash deposits making up roughly 18% of the bank’s deposits.
- The NYDFS concluded that on March 10, 2023 outflows from digital asset cash deposits were relatively proportional, meaning that depositors unrelated to digital assets were the driving force behind the withdrawals that triggered Signature Bank’s collapse.
- NYDFS Superintendent Adrienne Harris testified to the U.S. House Subcommittee on Digital Assets, Financial Technology and Inclusion that digital assets were not the cause of Signature Bank’s collapse.