Business Law

Banking Disruption in March 2023

The banking industry, both within the U.S. and internationally, experienced significant disruption in March 2023. Below is a summary of key events that occurred in March, including events related to the second- and third-largest bank failures in U.S. history: Silicon Valley Bank (SVB), Santa Clara, CA, and Signature Bank, New York, NY, respectively. Embedded hyperlinks will take readers to relevant source materials.

March 8: Silvergate Capital Corporation announces its intent to wind down operations and voluntarily liquidate Silvergate Bank, La Jolla, CA.

March 10: During the banking day, the California Department of Financial Protection and Innovation closes SVB, and the Federal Deposit Insurance Corporation (FDIC) is appointed as receiver. Following its appointment as receiver, the FDIC creates the Deposit Insurance National Bank of Santa Clara (DINB) and immediately transfers all insured deposits of SVB to DINB.

March 12

  • The New York State Department of Financial Services closes Signature Bank and appoints the FDIC as receiver. The FDIC transfers all the deposits and substantially all the assets of Signature Bank to Signature Bridge Bank, N.A.
  • On the recommendations of the FDIC and Federal Reserve, and after consultation with President Biden, U.S. Treasury Secretary Janet Yellen invokes the statutory Systemic Risk Exception. This allows the FDIC to make whole all depositors—both insured and uninsured—of SVB and Signature Bank.
  • The Federal Reserve Board establishes the Bank Term Funding Program, a new emergency lending facility pursuant to Section 13(3) of the Federal Reserve Act that serves to provide additional liquidity to eligible depository institutions.

Taken as a whole, these actions have a favorable impact in stabilizing the banking sector, although a number of Western regional banks continue to experience deposit outflows.

March 13: The FDIC transfers all deposits and substantially all assets of DINB to SVB Bridge Bank, N.A.

March 16: The U.S. Treasury Department, the Federal Reserve, the FDIC, and the Office of the Comptroller of the Currency announce that 11 banks have provided $30 billion in deposits to First Republic Bank, the 14th-largest U.S. bank by assets. In the joint statement, the agencies say the “show of support by a group of large banks . . . demonstrates the resilience of the banking system.”

March 17: SVB Financial Group, the financial holding company of SVB, files for Chapter 11 bankruptcy.

March 19

  • The FDIC announces that it has entered into a purchase and assumption agreement for “substantially all deposits and certain loan portfolios” of Signature Bridge Bank, N.A. with Flagstar Bank, N.A., a subsidiary of New York Community Bancorp, Inc.
  • UBS, with significant support from Swiss banking authorities, agrees to purchase Credit Suisse for $3.23 billion.
  • The Federal Reserve and other central banks update existing swap lines to “enhance the provision of [U.S. dollar] liquidity.”

March 26: First-Citizens Bank & Trust Company, Raleigh, North Carolina, acquires most of the assets and assumes all of the deposits of SVB Bridge Bank, N.A. Approximately $90 billion in securities and other assets remain in the receivership for disposition by the FDIC.

The Financial Institutions Committee will continue to monitor new developments and provide timely updates.

This summary was prepared by Jason Shafer, FIC member. Mr. Shafer is of counsel with the firm Morrison Foerster, in the San Diego office and is a member of that firm’s Financial Services Group. Formerly, Mr. Shafer served as a senior counsel in the legal division at the Federal Reserve Board, Washington, D.C. His email is

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