An FDIC report on three failed banks stated that depositors tied to the digital asset sector and active escrow accounts were more likely to move funds during the fastest bank runs in U.S. history. The study said Signature Bank’s active escrow deposits fell 88%.
The Federal Deposit Insurance Corporation (FDIC) released a report last week, detailing deposit flows at Silicon Valley Bank (SVB), Signature Bank (SBNY), and First Republic Bank (FRB). The staff study stated that depositors associated with the digital asset sector, along with active escrow depositors, were more likely to run during the 2023 failures.
Signature Bank had active escrow deposits that included pooled customer funds for investment-related companies, including firms facilitating digital asset investment, and banking-as-a-service financial technology companies. Active escrow deposits made up 13% to 15% of SBNY’s deposits before the run. The FDIC explained that beneficial owners of active escrow funds most likely had the ability to move funds quickly.
FDIC Chairman Travis Hill said:
“This study provides a highly detailed account of deposit flows during the fastest bank runs in U.S. history.”
