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The Federal Reserve Board introduced a consent order in opposition to Silvergate Capital Company and its subsidiary Silvergate Financial institution on Thursday, offering the required regulatory supervision for the monetary establishment’s voluntary self-liquidation. Silvergate initially introduced this drastic motion plan on March 8, 2023.
Silvergate Capital Company and Silvergate Financial institution, each headquartered in La Jolla, California, at the moment are directed to observe their beforehand introduced self-liquidation plan underneath the shut supervision of the Federal Reserve. The principal intent of the Board’s order is to make sure the preservation of the Deposit Insurance coverage Fund and to guard the rights of the financial institution’s depositors through the self-liquidation course of.
Below the consent order, Silvergate is expressly prohibited from finishing up sure monetary actions with out prior regulatory approval. These actions embrace making capital distributions and the dissipation of money belongings, making certain a clean and safe wind-down course of for all concerned events.
The Federal Reserve is just not performing alone on this transfer. It is taking these actions in coordination with the Division of Monetary Safety and Innovation of the State of California. Because the state chartering authority and state supervisor of Silvergate, the Division has a eager curiosity in overseeing the self-liquidation course of in a fashion that safeguards the pursuits of Silvergate’s depositors and the broader monetary system.
The choice is a major growth within the unfolding saga of Silvergate Financial institution, underscoring the Federal Reserve’s dedication to making sure the soundness and safety of the nation’s monetary establishments. The joint actions taken by the Federal Reserve and the State of California spotlight the rigorous regulatory framework in place to guard depositors and keep confidence within the banking sector.
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