Federal Reserve Gives Consent Order to Silvergate Capital Corporation for Voluntary Self-Liquidation
Luisa Crawford Jun 01, 2023 23:53
The Federal Reserve Board announced a consent order against Silvergate Capital Corporation and its subsidiary Silvergate Bank on Thursday, providing the necessary regulatory supervision for the financial institution's voluntary self-liquidation.
The Federal Reserve Board announced a consent order against Silvergate Capital Corporation and its subsidiary Silvergate Bank on Thursday, providing the necessary regulatory supervision for the financial institution's voluntary self-liquidation. Silvergate initially announced this drastic action plan on March 8, 2023.
Silvergate Capital Corporation and Silvergate Bank, both headquartered in La Jolla, California, are now directed to follow their previously announced self-liquidation plan under the close supervision of the Federal Reserve. The principal intent of the Board's order is to ensure the preservation of the Deposit Insurance Fund and to protect the rights of the bank's depositors during the self-liquidation process.
Under the consent order, Silvergate is expressly prohibited from carrying out certain financial activities without prior regulatory approval. These activities include making capital distributions and the dissipation of cash assets, ensuring a smooth and secure wind-down process for all involved parties.
The Federal Reserve is not acting alone in this move. It's taking these actions in coordination with the Department of Financial Protection and Innovation of the State of California. As the state chartering authority and state supervisor of Silvergate, the Department has a keen interest in overseeing the self-liquidation process in a manner that safeguards the interests of Silvergate's depositors and the broader financial system.
The decision is a significant development in the unfolding saga of Silvergate Bank, underscoring the Federal Reserve's commitment to ensuring the stability and security of the nation's financial institutions. The joint actions taken by the Federal Reserve and the State of California highlight the rigorous regulatory framework in place to protect depositors and maintain confidence in the banking sector.
Image source: Shutterstock