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While signature bank may have failed regardless, SVB failing directly caused concern and panic, resolving yes.

https://www.bloomberg.com/news/articles/2023-03-14/signature-was-seized-after-leaders-caused-crisis-of-confidence

It's pretty ambiguous. The case for no:

• Regulators closed the bank because they didn't trust managers. "The bank failed to provide reliable and consistent data, creating a significant crisis of confidence in the bank’s leadership"

• “By Sunday morning, the executives of the bank believed they had satisfied the need for the data and had secured the capital from the discount window and elsewhere,”

• The regulators “wanted to send a message to get people away from crypto,” Frank said in a Bloomberg radio interview Monday (I personally don't give much credence to this take)

The case for yes:

• I believe that what prompted the regulators to start looking into the numbers of Signature was a run on the bank that was partially (but not exclusively) motivated by the run on SVB. The article mentions one example of this

I agree with your individual points, but I disagree with the interpretation.

I believe that Signature's bank run was the immediate cause for the collapse. Regulators closed the bank as a direct result of the bank struggling to keep up with the run. While the regulators have good reason to cite lack of confidence in the bank's leadership, if the bank run hadn't happened, I'm pretty sure none of that would have happened, the regulators wouldn't have closed the bank and Signature would still be open now (and also through April 14).

I also believe that SVB was the immediate cause of Signature's bank run. The bank run happened on Friday, the day SVB collapsed. If the collapse was just due to crypto fears and not directly related to SVB, it would have made more sense for the bank run to take place earlier after Silvergate's collapse - but as far as I can tell the large-scale withdrawals didn't start until after SVB's collapse. Sources include:

• https://en.wikipedia.org/wiki/2023_global_banking_crisis#Collapse_of_Signature_Bank "According to Signature Bank board member Barney Frank, Signature Bank was hit with a multi-billion dollar bank run on Friday, March 10, with depositors expressing concern about cryptocurrency-related risks affecting the bank.[17] Investor confidence in the bank was also badly shaken, and the bank's stock declined by 23% on that Friday—the day on which Silicon Valley bank collapsed—marking the then-largest single-day decline of the Signature Bank's value in its 22-year history.[62]"

• https://en.wikipedia.org/wiki/Signature_Bank#Collapse "Former U.S. congressman Barney Frank, who was a member of the bank's board, noted that in the wake of the SVB collapse, clients became concerned over the bank's exposure to crypto and withdrew their funds, resulting in an "SVB-generated panic" that only set in late on Friday.[55] That day, according to Frank, customers withdrew more than $10 billion in deposits;[53] a person familiar with the matter told Bloomberg said the bank had lost 20 percent of its deposits, or $16.5 billion based on its end-of-2022 total."

• https://www.investopedia.com/what-happened-to-signature-bank-7370710 "In short, the failure of Silicon Valley Bank led to a Signature bank run on Friday, March 10, 2023. Depositors panicked after SVB failed because Signature had high amounts of uninsured deposits and was exposed to the crypto sector."

@jack when the question was asked signature already was failing so this is a really strange discussion

The question was asked on March 10, the day of SVB's failure. On that date, Signature had not yet failed, it was in the process of failing. Then on Sunday Signature failed, which I believe counts as YES.

@jack I know I'm just saying this is the dumbest question ever asked on this site

You could also say that on Friday First Republic was in the process of potentially failing - but they are still intact as of now. The point of this prediction market was to predict whether they would actually fail.

I don't think it's dumb, the question of whether another bank would fail is a perfectly good question. The problem of this question is that it asks for causality, which is hard to judge.

What does "cause" mean?

@octothorpe is SVB failing a direct impact to the other bank that otherwise would allow it to survive

All signs point to Signature failing at some point this month regardless of SVB collapsing. By the criteria, that can’t count as a yes.

Apparently, it was closed by regulators to send an anti-crypto message to banks. https://www.cnbc.com/2023/03/13/signature-bank-third-biggest-bank-failure-in-us-history.html

Crazy stuff!

That claim was by one of Signature's board members (Barney Frank), and it is not generally accepted by third parties.

Looking likely yes to me, but since there has been some contention in the comments I'm leaving it open until Friday at the earliest to see if we get more details

Circle raised Signature bank due to their SVB exposure causing withdrawals.

It is so.

*raided

@Gigacasting From a cursory internet search, I can't find any source which says that.

Signature bank just seized

@BTE has it been reported that it failed because of svb?

@BraulioValdivielsoMartine I don't know how old you were in 2008 but banks don't really fail in isolation very often. They fail like dominos fall because of similar risk profiles exacerbated by ongoing run on deposits.

It looks like Signature Bank's woes began long before the SVB crisis. Because of it's relationship with the crypto sector, it seems more likely to me to be related to Silvergate's collapse than SVB's. https://www.proquest.com/docview/2707266859?parentSessionId=v02fbJDloYmoh%2FMnSEssH4ywzXFPJtAzTCqP8deQ%2BfU%3D

@BTE that bank failures are correlated I know. I'm just a bit sceptical that SVB's caused Signature's. It's entirely possible, I just don't know

@BraulioValdivielsoMartine Would signature have failed if svb had not? Unlikely.

@BTE maybe, but @Yoav 's take that it was related to silvergate and not svb seems reasonable as well?

https://www.federalreserve.gov/newsevents/pressreleases/monetary20230312b.htm indicates a likely link between SVB and Signature. "We are also announcing a similar systemic risk exception for Signature Bank, New York, New York, which was closed today by its state chartering authority."

@jack This article argues that unlike SVB, Signature’s collapse was due to its links to the crypto industry, which was turning away from it. https://www.barrons.com/amp/articles/signature-bank-failure-a0adf63f#

Signatures stock price tracks somewhat closely with Bitcoin, down 80% since Feb ‘22. It was also down 30% in the month prior to March 10, when SVB collapsed, diverging sharply from Bitcoin—so it had unrelated, longer term issues, like Silvergate. Signature also didn’t have a Hold to Maturity liquidity issue. Just goes to show how much likelier this was a Signature-crypto problem rather than one like SVB’s.

@jack I don’t think announcing a systemic risk exception for both means they are actually linked. They just both happen to be very large banks (top 40), and the fed would rather not let their depositors lose money for many reasons.

@jack they could be linked in that both failures were caused (transitively) by higher interest rates, but need not have caused one another?

While there are definitely shared factors that caused both failures, I put very high likelihood that Signature would not have failed at this time if SVB had not failed.

E.g. https://www.investopedia.com/what-happened-to-signature-bank-7370710 says "In short, the failure of Silicon Valley Bank led to a Signature bank run on Friday, March 10, 2023. Depositors panicked after SVB failed because Signature had high amounts of uninsured deposits and was exposed to the crypto sector. "

@jack the question would have closed by now if that was an issue