Signature Bank's Move Into Higher-Risk Businesses, Such As Crypto Major Reason For Failure: WSJ

• The Signature Bank (NASDAQ: SBNY) had been reportedly retreating from real-estate lending as a share of its total business after Signature’s exposure exceeded what U.S. bank regulators recommended for managing risk.

• It also reduced real-estate lending after changes to New York tenant laws that made it difficult harder for landlords to profit from deregulation.

• “We don’t want the [commercial real estate] concentration that we currently have,” Signature’s vice chairman, John Tamberlane, said at a finance-industry conference in 2018.

• Signature branched out into heavy-equipment lending and loans to cab drivers. It later provided short-term loans for private-equity investors and launched a transaction platform targeting crypto businesses, Wall Street Journal reported.

• Signature further slowed the growth of its multifamily lending after New York state laws passed in 2019 closed several loopholes that had enabled landlords to deregulate rent-controlled apartments.

• Signature faced a crisis of confidence after regulators took over Silicon Valley Bank (NASDAQ: SIVB). The New York bank was also reeling from a bet on crypto banking that collapsed after the sector imploded and banking regulators cracked down on lenders’ exposure to digital assets, the report added.

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