Parallels and Compliance Lessons Arising from the 2023 Collapses of Silicon Valley Bank, Signature Bank, Silvergate Capital, and Credit Suisse

Elizabeth Fiorelli, Assistant Adviser of Global Legal and Compliance , Sumitomo Mitsui Trust Bank, Limited, New York Branch, USA

In March 2023, the banking world experienced a series of shocks as three large regional banks in the United States and international giant Credit Suisse collapsed. It began on Wednesday, March 8, 2023, when Silvergate Capital (’Silvergate”) announced it would cease operations and liquidate its assets after a bank run forced it to sell a lot of debt securities. On Friday, March 10, 2023, Silicon Valley Bank (’SVB”) collapsed after a week of turmoil and a bank run of its own. On Sunday, March 12, 2023, Signature Bank of New York (’SBNY”) was shut down by its New York regulators. On March 19, 2023, Credit Suisse was acquired by UBS, after a difficult couple of weeks that saw its shares take a precipitous slide. The banking crisis somewhat abated over the course of the following weeks, though First Republic just recently had to be bought out by JP Morgan Chase. As we continue to cautiously take in the situation, a lot of lessons may be gleaned from the missteps of these institutions.

Elizabeth Fiorelli is Assistant Adviser of Global Legal and Compliance, Sumitomo Mitsui Trust Bank, Limited, New York Branch. She is licensed as an attorney in the United States (in New York and in New Jersey). She has worked in the compliance industry for a number of financial institutions.

SMTB is the largest trust bank in Asia and a major international bank with offices throughout Asia, Europe and the U.S. Its parent holding company, Sumitomo Mitsui Trust Holdings, Inc. is a financial conglomerate with a variety of financial institution subsidiaries, including in the banking, asset management, real estate brokerage and leasing sectors.